[RPPTL LandTen] FW: HB 329 - Condo Assessments
Cary Sabol
cellsabol88 at yahoo.com
Thu Jan 7 12:30:35 PST 2010
I agree 100% with Harry's analysis here. This is another "kneejerk reaction to a temporary economic crisis" and as usual, unfairly places the burden. At least some of the other recent legislation has sunset provisions, but I didn't see that in this one. This Bill should be nixed altogether.
What is the Bar/RPPTL's position?
Cary
Cary P. Sabol, Esq.
P.O. Box 15981
West Palm Beach, Florida 33416
Phone: (561) 281-2744
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--- On Thu, 1/7/10, harry at evict.com <harry at evict.com> wrote:
From: harry at evict.com <harry at evict.com>
Subject: Re: [RPPTL LandTen] FW: HB 329 - Condo Assessments
To: "'RPPTL Landlord Tenant Committee'" <landten at lists.flabarrpptl.org>
Date: Thursday, January 7, 2010, 2:21 PM
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
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®
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 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
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
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
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
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.
"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
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
Offices in Illinois, Florida, and Wisconsin
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