Condominiums get some help collecting fees

Historic City News has some good news for local condominium owners and condominium associations who face the dilemma of members unable or unwilling to pay their monthly assessment to cover the cost of insurance, pool maintenance, landscape and other common expenses.

Governor Charlie Crist signed Senate Bill 1196 today, regarding condominium community associations. Crist praised the legislation for providing relief to communities facing financial strains in the current economy and incentives to buyers seeking to purchase condominiums. The Governor was joined by Pio Ieraci, president and chairman of Galt Mile Community Association.

Historic City News editor Michael Gold, who is a licensed Community Association Manager and condominium owner, reported that in his 328 unit neighborhood, only 27 units were 90 days delinquent — even though he is aware of others where delinquency in considerably higher.

“The common expenses must be paid by a community association; whether the manager is successful in collecting those monies back from the owners or not,” Gold said. “That is one of the responsibilities of the Community Association Manager — to pro-rate the charges for both short and long term maintenance and repairs as well as recurring monthly expenses like the water bill and electricity for the common street lights; then to bill the owners for their appropriate share.”

Non-profit condominium associations in Florida do not make money on monthly maintenance fees, however, if they can’t collect the budgeted expenses, and if there are no reserves that could be used for that purpose, the association is left with few choices — short of borrowing money to pay their bills.

“Fifteen years ago,” Gold said, “I bought a condominium at Sawgrass Country Club in Ponte Vedra Beach. I got an education about the power of an association to collect for any unbudgeted expenses if the board decides to go on a spending spree.”

In October, 2000, Gold sold his condominium to satisfy a surprise $21,164.88 claim representing his share of unscheduled painting, cosmetic parking lot resurfacing, and several other non-emergency repairs — none of which the association had the funds to pay for.

“Sounds like our local government, doesn’t it?” Gold joked. “That’s one of the things I hope to see change if I am elected to the St. Augustine City Commission in November. Spending money on non-essential projects when they don’t have the money to fund them is poor policymaking.”

Gold says, “We are fortunate that in my present condominium in St. Augustine, only eight of the units are in some stage of foreclosure.”

Several measures now empower community associations to collect funds from owners with delinquent assessments. Associations will now be able to collect funds directly from a tenant if the owner is delinquent in paying assessments, and the tenant can then deduct the payments from the rent owed to the delinquent unit owner.

Associations will now be able to suspend the rights of an owner or occupant to use common areas and recreational facilities if the owner is more than 90 days late in paying any monetary obligation. Gold said, “When I was President of my local condominium association, you often had members come to the Board meetings calling for us to stop delinquent owners from access to our amenities because we have a very nice clubhouse, spa, swimming pool, and fitness center. Explaining that we couldn’t stop them or their guests, even though they hadn’t paid their assessments, never sat well with other owners — or me, for that matter.”

Currently, if a mortgage lender forecloses on a delinquent unit, only assessments by the condominium association for the past six months can be collected — that has been extended to 12 months under the new law.

Other key provisions of the legislation are intended to increase sales of condominiums. To encourage bulk buying of condominiums in distressed communities, regulations are temporarily modified for certain condominium purchases. In addition, condominium owners are no longer required to purchase insurance on their individual units.

The legislation also provides condominium owners and associations flexibility in meeting fire safety and elevator regulations. Upon a majority vote, members of condominium associations will now be able to choose to be exempt from the requirement to retrofit elevators to operate during power outages. The members can also waive the requirement to retrofit common areas with fire sprinkler systems. For associations that do not choose to waive the retrofits, the deadline is extended from 2014 to 2019. In addition, buildings four stories tall or less, that also have exterior walkways, will not need to install a manual fire alarm system.