Newly Proposed Legislation Will Allow Florida HOAs the Ability to Foreclose Quickly if Dues (Assessments) are Unpaid

February 14, 2013 by David C. Swedelson

By David Swedelson, Condo Lawyer and HOA Attorney at SwedelsonGottlieb, Community Association Attorneys

Florida State Sen. Alan Hays, R-Umatilla, recently filed a bill that would allow community associations to foreclose quickly on homes or condo units in Florida community associations if the owners have not paid their dues/assessments. The proposed legislation provides that if a homeowner does not deposit the unpaid balance in a special registry as directed by a court, the association could foreclose immediately on the property.

An article that appeared in the Orlando Sentinel describes a process whereby owners can contest their associations' assessments, which can sometimes stretch on for years. “Homeowners behind on their community-association dues would have to make good on the full amount before fighting the charges, under proposed legislation that would also bring state oversight to Florida's homeowner associations.”

Supporters see this legislation as a way to shore up the finances of homeowner associations, which were hit hard by the housing slump and recession, during which large numbers of owners failed to pay their HOA dues/assessments.

The article points out what we all know, that in response to the drop in revenue, community associations have been cutting back on spending. This has resulted in deferred maintenance. Apparently, the author of the article has learned that in Florida, HOAs are now more likely to foreclose on properties in hopes of forcing payment. We are seeing a trend in this direction in California. Mark, link here to Foreclose Already article on the blog. Meanwhile, a community association’s dues-paying owners have had to shoulder more of the association's operating costs in place of the delinquent owners.

"'If you want to fight and prolong it, you have to pay up first,' said Jan Bergemann, president of the nonprofit Cyber Citizens for Justice, a DeLand-based [sic] focused on associations. 'They somehow have $2,000 to pay for a defense attorney, who will only prolong the process, when there really is no defense for not paying.'" The legislator authoring the bill states that his purpose in sponsoring the bill “is to try to establish more fairness in the homeowner-association.”

The bill would also prohibit board members from serving if they have been charged with a felony related to association business. The article points out as an example a Bimini Bay development, not far from Walt Disney World, where developer David Meadows continues to serve on the association board despite his arrest in September on four felony charges related to theft, fraud and embezzlement from the organization.

We doubt that this bill would have a chance of becoming law in California. Fortunately, we have non-judicial foreclosure as a fast method of collecting delinquent assessments, and we do not have to resort to lawsuits. For more information on that process, go to www.alslien.com.

David Swedelson can be contacted via email: dcs@sghoalaw.com