[RPPTL LandTen] Recent News Report

[Arthur J. Menor]

For those of you who may not have seen this story previously.

Judge rules subsidized rent payments should go to homeowner association

Paola Iuspa-Abbott Contact<mailto:piuspa at alm.com>All Articles<http://quest.law.com/Search/Search.do?Ntt="Paola%20Iuspa-Abbott"&x=0&y=0&Nty=1&N=0&site=law&Ntk=SI_All&cx=0&sortVar=1>

Daily Business Review

July 27, 2011

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Photo by Melanie Bell

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Photo by Melanie Bell

When a Lake Worth homeowners association tried to collect rent from a low-income tenant to make up for the property owner's delinquent fees, it hit a bureaucratic blockade.

The West Palm Beach Housing Authority was responsible for paying most of the tenant's $1,784 in monthly rent through the federal Section 8 Voucher Program. The Willoughby Estates Homeowners' Association successfully went to court to prod the authority into paying rent to the association instead of the owner of the property.

The July 19 court order is a victory for homeowner associations because it clarifies their rent-collection rights in dealing with tenants who receive public rent assistance.

The Section 8 rent subsidy program is administered by local housing authorities on behalf of the U.S. Department of Housing and Urban Development, which provides the funding.

Palm Beach Circuit Judge John Hoy ruled that the West Palm Beach Housing Authority wasn't exempt from a Florida Statute 720.3085(8) and had to make rental payments to the association until back maintenance fees, interest and others fees were paid. Homeowner Lindel Anderson owed the association more than $2,900.

The law allows condo and homeowners associations to collect current and future rent from tenants whose landlords are in arrears. The law, enacted a year ago, was recently amended to allow for collection of past due rent as well.

Before the ruling, the housing authority provided $1,509 in rent and tenant Elizabeth Allen was responsible for the remaining $275.

When approached by the association, Allen agreed to pay her share directly to Willoughby Estates, but the housing authority resisted paying Willoughby, according to Pompano Beach attorney Michael Bender, who represents the association.

"The housing authority believed the statute didn't mandate what we were demanding and said 'short of a court order, we are not going to comply,' " said Bender, a partner with Kaye & Bender.

Laurel Robinson, executive director of the housing authority, didn't return a call for comment.

"This is an example of where a new statute doesn't cover all possibilities so a court needs to step in to interpret the statute," said Fort Lauderdale attorney Matthew Zifrony, who represents associations but was not involved in the case. "Does it mean that other associations and other judges must follow that ruling? No. But it gives them a lot of guidance."

Zifrony said the ruling helps associations, housing authorities and HUD to understand who should receive a tenant's rent payment.

"It is like two people saying to you 'pay me money,'" the Tripp Scott attorney said. "You know you owe the money but you don't know who to pay. So they didn't want to pay to the wrong person. That's why they needed a court ruling."

Bender hopes other association lawyers will be able to use Hoy's ruling to help persuade judges when arguing similar cases.

"This is a circuit court ruling," he added. "So while it is not binding precedent in Florida, it is at least persuasive."

The July 19 ruling resulted from a motion stemming from a foreclosure lawsuit Willoughby Estates filed against Anderson earlier this year. The association was seeking to recover more than $2,900 in delinquent fees. Bender said the suit may be dismissed after the rental proceeds pay off the debt.

Bender expects the ruling will also help condo associations.

"The basis for the opinion would be at least persuasive if a condo association has a similar issue," he said.

Boca Raton attorney Louis Caplan, a partner with Sachs Sax Caplan, said the court order is good news for Section 8 tenants, who are often rejected by associations worried they may not be able to collect rent from a housing authority and HUD.

"The ruling could make associations much more comfortable with Section 8 rentals within their communities because now HUD could get them paid," he said.

Paola Iuspa-Abbott can be reached at (305) 347-6657.


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Arthur J. Menor
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