[RPPTL LandTen] FW: HB 329 - Condo Assessments
Greg Hass
GregH at floridarealtors.org
Thu Jan 7 11:46:57 PST 2010
Harry, your points are very well taken - I agree the situation is a
total mess and I'm not sure what can be done legislatively to cure what
is essentially an economic problem. My brother (a law professor in NY)
was visiting over the holidays and he mentioned that he was thinking of
buying a Florida condo as an investment - suffice it to say he changed
his mind after I got done talking to him about the potential legal
pitfalls of same. With that said, I believe the proposal I suggested
below is, overall, a fair and balanced approach to a messy situation
that has no perfect solution.
As I stated earlier, I'm not sure what if any position FAR will take on
this bill. I'm forwarding all these comments to our legislative
attorney in Tallahassee, Trey Goldman, for his consideration.
Regards,
Greg
Greg Hass, Senior Counsel
Office of Law & Policy
Florida REALTORS(r)
7025 Augusta National Drive
Orlando, FL 32872-5025
Ph: (407) 438-1400
GregH at FAR.org
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From: landten-bounces at lists.flabarrpptl.org
[mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of
harry at evict.com
Sent: Thursday, January 07, 2010 2:21 PM
To: 'RPPTL Landlord Tenant Committee'
Subject: Re: [RPPTL LandTen] FW: HB 329 - Condo Assessments
Dear Greg,
I have to respectfully oppose any attempt to open the door wider for a
tenant to withhold rent, break a lease or voluntarily pay an
association. This will not work on a practical basis and will cause
major problems with evictions. Suppose they pay partial? You know the
association is going to accept the money and how do I evict?
The whole thing needs to be scuttled.
It is a mess. It is another example of a kneejerk reaction to a
temporary economic crisis or a possible problem that the landlord may
eventually cure. The laws have been in place for years, they have
worked fine for years, the associations just need to deal with it. It
is bad enough that tenants think they can stop paying rent when the
owner is in foreclosure.
The restrictions and powers that associations already have are causing a
price drop in condo and homeowners associations as they are making it
nearly impossible for unit owners to rent out their units i.e.
investment buyers will not want to buy. This bill will give them more
power and in the end hurt all unit owners.
I would hope that FAR strongly comes out and takes a stand against what
the associations are doing now, legally and illegally and also fight new
onerous laws.
I can put you in touch with many of your FAR property manager members
who will tell you the horror stories. If anything, we need laws limiting
the powers of these associations to essentially discriminate against
renters and protected classes. Watch how they approve a white doctor in
5 days but an African American with children, the approval process takes
so long the applicant gives up. We discussed this last August at the FAR
Property Management Council meeting and the crowd was up in arms over
it. That is the tip of the iceberg. If I had time on my hands I would
have testers go out, apply and I would be filing Fair Housing actions
all day long. Condos and HOAs do not want renters period. In one way you
can't blame them because they have to deal with the California buyers
who put the unit on Craig's List and rents it to anyone who calls them
up and can breathe.
Harry Heist
LAW OFFICES OF
HEIST, WEISSE & DAVIS, P.A.
PH: 1 800 253 8428
FAX: 1 800 367 9038
"Serving the Property Management Professional"
Website: www.evict.com <http://www.evict.com/>
Email: harry at evict.com
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From: landten-bounces at lists.flabarrpptl.org
[mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of Greg Hass
Sent: Thursday, January 07, 2010 12:25 PM
To: RPPTL Landlord Tenant Committee
Subject: Re: [RPPTL LandTen] FW: HB 329 - Condo Assessments
Thanks Scott, that was a very detailed analysis.
My own personal opinion (I'm not sure what official position the Florida
Realtors will take on this matter, if any), is that the tenants should
not be made liable to the association for unpaid unit assessments, etc.
My view is that this bill as drafted is overkill and many of the
provisions will just add further confusion. The associations currently
have a simple (albeit time consuming and costly) remedy - foreclose
their assessment lien and then they can rent the unit to whoever they
want and collect all the rent (although I suppose the new Protecting
Tenants at Foreclosure Act would come into play). Another remedy
apparently used with some success is to go to court and get a blanket
receivership. So the associations already have remedies, and I don't
think the association should be allowed to shift to the T the legal
obligation of paying a unit owner's assessment simply because the
association doesn't want to go through the time/trouble of foreclosing
their assessment lien.
I would scuttle the entire bill and simply propose the following. Amend
Chapter 83 to say that if a Tenant receives notice from an association
asking the T to pay rent directly to the association, the tenant MAY
(not must) choose to abide by that request and doing so would be an
absolute defense to an eviction action filed by the LL under Chapter 83.
I would stick this in 83.60. The Tenants incentive to VOUNTARILY
agree to pay rent to the association would be the hope that by doing so,
the association will sit back and choose not to file a foreclosure
action against the unit for its unpaid assessments thereby allowing the
T to stay put. This would also keep the liability for unpaid
assessments squarely on the unit owner/LL and would NOT purport to
somehow make the T personally liable for condo unit assessments. The
onus would then be on the deadbeat unit owner/LL to go to court and get
a court order directing the T to pay rent to the LL or alternatively get
the association to turn over the rent money to the LL. I predict most
LL's would just disappear at that point and not bother, leaving the
battle between the lender and the association over rent moneys and
assessments. The association would be sort of a surrogate LL until
either the association or lender chose to foreclose. But in the
meantime the association will have cash flow from the T to offset the
unpaid assessments which will make all the other unit owners happy. I
suppose 718 would also need to be amended to say that if a unit owner is
more than X days delinquent on assessments, it would trigger the ability
of the association to send the request to T and that any rents collected
by the association would be credited to the amounts owed by the unit
owner.
To further aid my solution above, I would recommend amending 83.51 to
include an obligation of the LL to keep current on condo unit
assessments. That way, if they failed to do so, the T could presumably
use section 83.56 (1) to thereby terminate the lease if the LL doesn't
come into compliance after the T's 7 day notice to LL. This would give
the T some flexibility - they could either use 83.56 (1) to terminate
the lease and get out of a problematic situation where the real LL has
disappeared, or the T could sit back and, if requested by the
association to pay rent to them, voluntarily pay rent to the association
with the hope that it will help stave off foreclosure by the
association. If the T were to terminate the lease under this provision,
the lack of cash flow would presumably serve to help accelerate the
decision to file foreclosure by either the association or lender, and
the property could be quickly put back on the market for a new buyer who
can begin paying assessments.
Regards,
Greg
Greg Hass, Senior Counsel
Office of Law & Policy
Florida REALTORS(r)
7025 Augusta National Drive
Orlando, FL 32872-5025
Ph: (407) 438-1400
GregH at FAR.org <mailto:GregH at FAR.org>
LEGAL DISCLAIMER: The information transmitted is intended solely for
the individual or entity to which it is addressed and may contain
confidential and/or privileged material. Any review, retransmission,
dissemination or other use of or taking action in reliance upon this
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prohibited. If you have received this email in error please contact the
sender and delete the material from any computer.
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From: landten-bounces at lists.flabarrpptl.org
[mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of Frank, Scott
A.
Sent: Thursday, January 07, 2010 10:09 AM
To: RPPTL Landlord Tenant Committee
Subject: [RPPTL LandTen] FW: HB 329 - Condo Assessments
FYI - Please see our comments to HB 329, as well as Michael Gelfand's
response and my reply to Michael. Read from bottom up. I will forward
on any new substantive responses we receive.
I have also attached a copy of the proposed bill for your reference.
We will discuss further at next week's meeting (unless no one wants to
discuss it, in which case we will mention it and quickly move on).
Scott A Frank
Attorney at Law
ARNSTEIN & LEHR LLP
www.arnstein.com <http://www.arnstein.com/>
515 North Flagler Drive
Sixth Floor
West Palm Beach, Florida 33401-4323
Phone: 561.833.9800
Fax: 561.655.5551
433 Plaza Real
Suite 275
Boca Raton, Florida 33401-4323
Phone: 561.962.4145
Fax: 561.962.4245
SAFrank at arnstein.com <mailto:SAFrank at arnstein.com>
Offices in Illinois, Florida, and Wisconsin
________________________________
From: Frank, Scott A.
Sent: Thursday, January 07, 2010 8:46 AM
To: 'Michael J. Gelfand'
Cc: gmeyer at carltonfields.com; Neil B. Shoter;
RFreedman at CarltonFields.com; smezer at bushross.com
Subject: RE: HB 329 - Condo Assessments
Michael:
I understand the bind that associations are finding themselves in these
days. And I also have no sympathy for landlords who are accepting rent
and then not paying their dues. However, I still have issues with the
bill in that (i) while it does offer the innocent tenant some
protection, it is still geared toward the association (I would feel
better from the tenant side if the notice provision were clearer and the
tenant had the right to "reject" the lease and stop paying assessments
once he or she vacates); and (ii) it allows the association to take
private property - the rent money is the landlord's property until a
court says otherwise - without any form of due process or even (for
current owners as of the date the bill is enacted) any prior notice of
the possibility. Again, I would feel more comfortable if the bill were
drafted as an "opt-in" clause, allowing existing associations to adopt
the provisions by an affirmative vote of membership. That way, no owner
could argue lack of notice.
Just my $0.02.
Scott A Frank
Attorney at Law
ARNSTEIN & LEHR LLP
www.arnstein.com <http://www.arnstein.com/>
515 North Flagler Drive
Sixth Floor
West Palm Beach, Florida 33401-4323
Phone: 561.833.9800
Fax: 561.655.5551
433 Plaza Real
Suite 275
Boca Raton, Florida 33401-4323
Phone: 561.962.4145
Fax: 561.962.4245
SAFrank at arnstein.com <mailto:SAFrank at arnstein.com>
Offices in Illinois, Florida, and Wisconsin
________________________________
From: Michael J. Gelfand [mailto:mjgelfand at gelfandarpe.com]
Sent: Thursday, January 07, 2010 1:23 AM
To: Frank, Scott A.
Cc: gmeyer at carltonfields.com; Neil B. Shoter;
RFreedman at CarltonFields.com; smezer at bushross.com
Subject: RE: HB 329 - Condo Assessments
Dear Scott
Thanks for the detailed review. I am forwarding to Rob Freedman and
Steven Mezer of the Condominium Committee to consider the issues raised
in the context of a number of bills with similar provisions.
There are a number of points that bear consideration. I note in passing
that an increasing number of community associations are not waiting for
the legislature to act and associations members are overwhelmingly
approving similar provisions as covenants. To place this in context for
your committee members on a policy level, understanding the need to
address procedure, there appears to be little sympathy for landlords
that are not paying assessments while the landlord still pockets
assessments.
Michael J. Gelfand
Florida Bar Board Certified Real Estate Attorney
Florida Supreme Court Certified Mediator:
Civil Circuit Court & Civil County Court
Gelfand & Arpe, P.A. <http://www.gelfandarpe.com/>
"Assisting Communities to Efficiently Reach Goals"
Regions Financial Tower, Suite 1220
1555 Palm Beach Lakes Blvd.
West Palm Beach Florida 33401
(561) 655-6224
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From: Frank, Scott A. [mailto:SAFrank at arnstein.com]
Sent: Wednesday, January 06, 2010 2:39 PM
To: Michael J. Gelfand
Cc: gmeyer at carltonfields.com; Neil B. Shoter
Subject: HB 329 - Condo Assessments
You have asked the members of the Landlord-Tenant Committee to review
and comment on this bill. After soliciting the input of the members of
the Committee, I have attempted to put together below an amalgamation of
the comments I received, as well as my own thoughts:
The first issue is the question of whether 83.46 (Duration of Tenancies)
is the right place to put this new language. Could it not possibly fit
better in 83.49 or 83.51? Or possibly even its own new section?
Also, with respect to condo law (I know, not our purview, but anyway),
doesn't this law allow associations to take property without due
process, without such right being explicit in the declaration? In
essence, the rent payment is the property of the unit owner, which
property cannot typically be taken away by an association without either
(i) a judicial determination, or (ii) an explicit right spelled out in
the declaration (or even in a statute in effect as of the date of
conveyance to the specific unit owner). Can associations tow and sell a
delinquent unit owner's car when it is parked in the common area? At
the very least, this statute should not apply to any declarations in
effect unless the specific association votes to adopt it.
Another preliminary thought is the question of whether the remedy
provided here is the appropriate one. By making tenants jointly and
severally liable, the tenant is forced to take on an obligation that
(s)he may not want. What if the tenant, not wanting to stay in a bad
situation that may turn worse, simply decides to move out? As the
tenant is liable under the statute for all sums due under the lease from
the date of the association's notice, the tenant would be required to
pay the remainder of the rent, even post-vacating. (While the landlord
may then have a claim against the tenant for unpaid rent for the
remainder of the term, good luck to him on collecting.) A more
appropriate remedy may be to make the tenant liable for all sums due
under the lease from the date of notice until the date of tenant's
surrender. The right to evict and to deny services are appropriate to
enforce this obligation.
In fact, as a related matter, one may wish to consider amending 83.51 to
require landlord to maintain the payment of association dues. This
would allow the tenant the right to vacate, without fear of suit, if
landlord does not in fact pay the fees.
The proposed statute states that the tenant is responsible to pay the
association from the date of the association's "notice", but does not
specify what constitutes valid notice. Perhaps it would be helpful to
include a statutory notice form that spells out (i) from what date the
tenant is to pay the association (must be at least 14-30 days after the
date of the notice), (ii) the statutory limits of tenant's liability (in
layman's language), (iii) what the associations' remedies are for
tenant's failure, and (iv) what rights tenant has against the landlord
or in defense of an action initiated by the landlord. This notice
should be sent via certified mail or other receipted delivery, and the
tenant should not be liable without proof of delivery or refusal.
Perhaps even a requirement of physical delivery to the unit itself.
Also, the notice should be delivered to the unit owner, again via
certified mail, to the address for the owner that the association has on
record. In addition, with respect to notice, if the tenant fails to
make a payment, the association's remedies should be subject to a notice
and cure period longer than the statutory 3-day notice.
How is the tenant notified that the owner is delinquent? Is the tenant
given proof that the owner has been notified of the delinquency? And
will the association indemnify the tenant - to the extent of payments
made to the association - if the owner/landlord sues for nonpayment
under the lease? At the very least, the statute should amend Ch. 83 to
provide that it is an absolute defense to an eviction for nonpayment
that the payments were made to the association in accordance with this
statute.
The statute in a number of places keeps stating that the tenant is
responsible for "all" or "any" monies owed by the landlord. This seems
overbroad, and should be limited to an itemized list (assessments,
fines, late fees, attorneys' fees) or specify sums payable under the
declaration.
With respect to the remedies stated in (4)(b)(1), what "other remedies"
are available to the Association? As there is no privity between the
parties, they cannot collect contract damages under the lease - the only
remedies that should be available to the association are those that are
granted explicitly by this statute (or the declaration). If the intent
is to allow for a suit for monetary damages, then the statute (or
declaration) should spell this out explicitly. And I am not sure how
the association can sue for eviction under its own name (83.56 and 83.59
give the right to pursue a claim for possession to the "landlord" -
these would need to be amended as well). The statute (or declaration)
should contain an explicit assignment of the owner's rights to sue,
provided the assignment is limited to those amounts due from tenant
under this statute.
The limitation of tenant's liability (amount to be paid under rental
agreement) is specified in 83.46(4)(a) and 83.46(4)(b)(1) but missing in
83.46(4)(b) and 83.46(4)(b)(1). This needs to be rectified, as the
language is very difficult to follow. In addition, the language here
and in (4)(b)(2) is very unclear as to what exactly are the limits of
tenant's liability. A suggestion on how to spell out tenant's
liability may be to simply say that tenant is only liable to pay in any
given month the sums that tenant is scheduled to pay under the lease in
that given month.
The language concerning prepaid rent/security deposits in (4)(a)(2) is
again highly confusing, and somewhat punishing to tenants. To the
extent the written lease acknowledges receipt of any prepaid rent or
security deposit, the tenant's liability should be decreased by such
amount. The cancelled check requirement is excessive, especially
considering that many lower income tenants pay rent in cash or by money
order.
As to 718.106, the first question is whether the term "foreclosure"
refers to mortgage foreclosure or foreclosure of the association's lien.
In addition, the ability to restrict common area access is, at best,
vague, and at worst completely overreaching. Also, who is to be the
arbiter of "fair market rent" in order to determine if the tenant is
legitimate? A better option may be to just require that the lease be an
arms-length transaction between unrelated parties, which does not allow
for the unit owner or any member of his/her family to reside in the
unit. If there is still concern about fraud, there could be a provision
allowing the lease to be vitiated by the association if it is determined
that the unit owner is living in the unit.
We will not address the proposed changes to 718.116(b), as these do not
come within the purview of this committee.
Finally, is there a reason why this provision applies to residential
units only, and not commercial units?
Please note that our comments do not reflect any collective judgment as
to whether the substance and intent of the proposed bill is for the
better or worse, as our committee includes members who represent varying
interests in residential and commercial leasing. Rather it is our intent
to assist the legislature by pointing out what we believe to be
significant issues with the bill as drafted.
Please advise if you wish for any clarification of the above or if we
can be of any further assistance. Thank you.
Scott A Frank
Attorney at Law
ARNSTEIN & LEHR LLP
www.arnstein.com <http://www.arnstein.com/>
515 North Flagler Drive
Sixth Floor
West Palm Beach, Florida 33401-4323
Phone: 561.833.9800
Fax: 561.655.5551
433 Plaza Real
Suite 275
Boca Raton, Florida 33401-4323
Phone: 561.962.4145
Fax: 561.962.4245
SAFrank at arnstein.com <mailto:SAFrank at arnstein.com>
Offices in Illinois, Florida, and Wisconsin
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