REPRESENTATIVE ELLYN BOGDANOFF

HB 419, sponsored by Representative Ellyn Bogdanoff, reverses some of the strange and expensive regulations that were piggy-backed onto large omnibus association and insurance bills at the end of last year's session. Her bill requires coverage under a condominium unit owner's residential property insurance policy to include a specified amount of loss-assessment coverage. It requires each policy to clarify that such coverage is excess coverage and specify when the date of loss occurs. It requires that coverage for certain personal property to be the responsibility of the condominium unit owner under certain circumstances. Subrogation uncertainties posed by these gray areas were abused by carriers seeking to delay or reject related claims. The bill revises board meeting notice requirements. It extends the installation deadline for certain expensive components of an Engineered Life Safety System and contains language to enable unfettered participation in a Self Insured Windstorm Trust.

SENATOR DENNIS L. JONES

Also known as the "Condominium Glitch Bill," SB 714 (sponsored by Senator Dennis L. Jones, D.C.) is also intended to correct several unintended consequences from language relating to insurance that passed in 2008. The bill requires that coverage under a unit owner's policy for certain assessments include at least a minimum amount of loss assessment coverage. It provides an exemption for certain condominiums from installing a manual fire alarm system as required in the Life Safety Code if certain conditions are met. It requires that adequate property insurance be based upon the replacement cost of the property to be insured as determined by an independent appraisal or update of a prior appraisal.

While similar, Bogdanoff's HB 419 contained incremental palliative benefits for cash-strapped associations. On April 15^th, Senator David Aronberg finally offered an amendment adding comparable language to Senator Jones' Senate Bill 714 (SB 714) (co-introduced by Senators Mike Fasano and Jeremy Ring), allowing the legislation's major provisions to be independently vetted by the Statehouse and Senate.

On April 27^th, SB 714 passed a vote in the Senate by 38 Yeas vs. 0 Nays. The next day, it was substituted for Bogdanoff's HB 419. On April 29^th, the bill passed a vote in the House by 114 Yeas vs. 2 Nays (4 not voting). After immediately returning to the Senate, it was ordered enrolled that same day. Unfortunately, when Bogdanoff's HB 419 was swapped out for SB 714, the language addressing the OIR's inability to oversee self insurance funds without traditional profit centers became a casualty, forcing the implementation of an alternative approach to correcting the bureaucratic deficiency.

Senate Bill 714 was sent to the Governor shortly after being enrolled. To afford the Governor's staff adequate opportunity to evaluate legislation, surviving bills are usually spaced out over approximately 6 weeks - placing the bill in the Governor's "on deck" file in May or even June. Upon receiving the bill, the Governor will have 15 days to take action. While the bill can become law with or without the Governor's signature, a gubernatorial veto will undo the legislature's handiwork. If this bill becomes law on July 1, 2009 (its effective date), it will provide the following:

1. For policies issued or renewed on or after July 1, 2009, coverage under a unit owner's residential property policy (HO-6 policy) shall include property loss assessment coverage of at least $2,000 for all assessments made as a result of the same direct loss to the property, regardless of the number of assessments, owned by all members of the association collectively when such loss is the type of loss covered by the unit owner's HO-6 policy. A deductible of no more than $250.00 per direct property loss shall apply.

2. If a deductible was or will be applied to other property loss sustained by the unit owner resulting from the same direct loss to the property, no deductible shall apply to the loss assessment coverage. Every HO-6 policy must contain a provision which states that the coverage provided by such policy is excess coverage over the amount recoverable under any other policy covering the same property.

3. A condominium that is one or two stories in height and has an "exterior means of egress corridor" (i.e. catwalk) is exempt from having to install a manual fire alarm system as required in Section 9.6 of the Life Safety Code.

4. A property insurance policy or program (i.e. - self insurance fund) that was issued before January 1, 2000, and which has provided uninterrupted property insurance coverage for a group of no fewer than three communities is NOT subject to review and approval by the Office of Insurance Regulation (OIR) until renewed after July 1, 2009.

5. The notice for the board meeting at which insurance deductibles will be established NO LONGER needs to state the proposed deductible, the funds available, the board's assessment authority or an estimate for any potential assessment needed to pay such deductibles.

6. Clarifies that the association's coverage excludes all personal property located within the boundaries of a unit and which serve only such unit and that such property insurance coverage shall be the owner's responsibility.

7. Removes the requirement that the association be named as an additional insured and loss payee on the owner's HO-6 policy.

8. Removes the requirement that the association inquire as to each owner's HO-6 coverage and removes the ability of the association to purchase or "force place" any missing unit owner policies.

9. Changes the standard for the association's insurance coverage from "full insurable value" to the "replacement cost".

10. If the number of board members whose terms have expired exceeds the numbers of candidates running for those seats, each expired board member would now become eligible for reappointment to the board rather than having to run for re-election.

11. Co-owners of a unit would both be eligible to serve on the board ONLY IF they own more than one unit and are not co-occupants of any unit. Timeshares would be specifically exempted from the co-ownership occupancy restriction.

12. Adds fines, fees and special assessments to the list of items that render an owner ineligible to serve on the board if not paid for 90 days.

13. Removes the requirement to sign and send in a Candidate Certification form before an election and replaces it with the requirement that each newly elected director must certify in writing within 90 days after being elected that he or she has read the association's declaration, articles of incorporation, bylaws and current written policies. These newly elected directors must also certify that they will work to uphold such documents to the best of their ability and will faithfully discharge thier fiduciary duties to the members. In lieu of this written certification, directors may also submit a certificate that they have satisfactorily completed an educational program administered by a Division-approved educational provider. Failure to file either the certifcation or the educational course certificate will result in the director being unable to serve any longer on the board.

14. Extends the deadline for residential high-rises to retrofit their common areas with sprinkler systems from the current 2014 to 2025.

15. Repeals Section 553.509 (2) which requires residential buildings with at least one public elevator to have an alternate power source such as a generator.

GOVERNOR CHARLIE CRIST

SB 714 provides some much needed assistance to associations fiscally crippled by foreclosure precipitated maintenance shortages, short and long term debt service, uninsured storm damage repairs, super-sized deductibles and carrier mandated hurricane mitigation upgrades - primarily by removing some of the troublesome insurance provisions created last year. If your community can benefit from the financial relief provided in this bill, please make it a priority to email the governor and express a strong message of support NOW. The deep-pocketed industry groups that stand to lose $billions (The American and National Fire Sprinkler Associations and the Plumbers and Pipefitters Union) will fund vehement opposition to this bill to elicit a gubernatorial veto. In 2006, a similar bill sailed through the House and Senate to the lame duck Governor's desk where it was dismantled by a veto. Since the recession has sharply intensified the need for relief, the legislature has provided a second bite at the apple. To postpone a $million PLUS assessment by your association, help nurse this bill safely into law. The Governor has repeatedly proven his sensitivity to constituent concerns and willingness to incorporate them into his decisions.

• Click Here for SB 714 Page
• Click Here for SB 714 Bill Text

SENATOR MIKE FASANO

Senate Bill 880 (SB 880) sponsored by Senator Mike Fasano and co-introduced by Senator Jeremy Ring, makes a series of changes to the Condominium Act, including revisions to the insurance requirements enacted in 2008.

SENATOR JEREMY RING

SB 880, if it ultimately becomes law, will allow condominium members’ voting rights to be suspended if they are delinquent in paying assessments, allow condominium associations to suspend use rights to common facilities, allow associations to collect unpaid assessments from tenants, allow for the collection of costs imposed by a management company related to the recovery of unpaid assessments and amend the Homeowners Association Act, Section 720, Florida Statutes, to provide a vehicle to allow a homeowners association, if approved by the members, to acquire golf courses or other recreational facilities. SB 880 also addresses the purchase of units by “bulk buyers.” The intent is to stimulate the condominium market by encouraging purchasers to buy units in bulk. This would especially help distressed properties with large numbers of units that were never sold by the Developer.

• Records: The legislation limits the liability of destroyed and damaged records and for the misuse of records by others. It also expands the personal information in the records that is considered confidential and would include e-mail addresses in the protected records.

• Amendments: The legislation modifies 718.110 (13) to permit amendments to rental restrictions that do not affect the restrictions on the rental duration.

• Board Elections: The legislation modifies the eligibility requirements for board members and modifies the certification process for candidates for the board.

• Assessment Delinquencies: The Legislation would require a director to vacate the office when delinquent in the payment of any fee, assessment or special assessment due to the association for more than 90 days; it would authorized the association to collect assessments from the tenant of a delinquent owner; and it would authorize the association to deny a delinquent owner to use the common element amenities.

• Telecommunication Bulk Contracts: The legislation revises the provisions for bulk telecommunication services and expands the language to include new technologies.

• Budget: The legislation revises the format for association budgets to exclude all expenses of the unit owners.

• Fees for Delinquency Notice: The legislation would modify 718.116 and authorize a fee of up to $75 for collection letters notifying an owner of assessment delinquencies.

• Bulk Buyer: There is a traveling amendment that creates a Part VII to the Act that would clarify the rights and responsibilities of a bulk buyer of units at a distress sale or foreclosure sale.

When initially filed in the Senate on January 21, 2009, SB 880 was referred to Regulated Industries, Banking and Insurance, Community Affairs and the Judiciary Committees for review. On April 1^st, it passed out of Regulated Industries by a vote of 8 Yeas vs. 0 Nays. Following the filing of a Committee Substitute on April 3^rd,the original reference to Banking and Insurance was removed. On April 14^th, the amended bill passed out of Community Affairs by a vote of 10 Yeas vs. 0 Nays. The final committee hurdle was forded on April 21^st, when it passed Judiciary by a vote of 9 Yeas vs. 0 Nays. Following the filing of another Committee Substitute on April 23^rd, it was placed on the Special Order Calendar and read a second time on April 28^th.

SB 880 contained language which would have allowed condominium boards to suspend a delinquent owner's use rights to the common elements; would have allowed a board to collect regular assessments from a tenant in a delinquent unit and would have held banks responsible for the maintenance and preservation of units during the pendency of their foreclosure actions rather than having the paying owners shoulder that burden. Unfortunately, when detrimental last minute amendments were added to the bill, consensus hit a brick wall. These eleventh hour additions would have prevented HOA's from charging a transfer fee in connection with the sale or lease of a home and would have made it more difficult for associations to obtain loans and lines of credit. After poisoning the popular "lender reform" legislation, clouds rolled in as the bill was repeatedly placed on the Special Order Calendar, fruitlessly awaiting attention by the full Senate.

• Click Here for SB 880 Page
• Click Here for SB 880 Bill Text (as of 4/23/2009)

REP. BRYAN NELSON

HB 1495, sponsored by Representative Bryan Nelson, revises provisions of law relating to SBA investments in revenue bonds, Florida Hurricane Catastrophe Fund, My Safe Florida Home Program, debt cancellation products under casualty insurance, standards for rate filings, residential property insurance rate filings, transparency in rate regulation filings relating to attorney-client privilege & work product exemptions.

SENATOR GARRETT RICHTER

Its sister bill in the Senate is SB 1950, sponsored by Senator Garrett S. Richter. Revises the dates of an insurer's contract year for purposes of calculating the insurer's retention. Requires the State Board of Administration to offer an additional amount of reimbursement coverage to certain insurers that purchased coverage during a certain calendar year. Prohibits a public adjuster from accepting referrals for compensation from a person with whom said adjuster conducts business, etc.

These are comprehensive property insurance bills. Section 3 of CS/SB 1495 creates a new mitigation loan program to upgrade condominiums containing 200 units or less against wind damage. Eligible communities must be in the wind-borne debris region and be insured by Citizens. The bill also phases out the upper levels of a state-supported hurricane insurance backup pool by $2 billion a year until its gone altogether in six years.

Unfortunately, the mitigation program was eliminated in the eleventh hour (see here). This program was designed to assist condominium owners in "weatherizing their condominium units and mitigating all such units against wind damage." The program would have necessitated the following minimum requirements:

1. The Department of Financial Services will contract with lenders to offer weatherization and hurricane mitigation loan subsidies equal to a competitive rate of interest on a loan balance of up to $5,000 per condominium unit for 3 years. The interest subsidy may be paid in advance by the department to a lender participating in the program.

2. The loans must be used to purchase or install weatherization measures and hurricane mitigation measures.

3. A participating condominium association must agree to purchase and install weatherization and mitigation measures for each unit in the condominium that lacks those measures.

4. To be eligible for this program, a condominium must have been permitted for construction on or before March 1, 2002 and must be located in the wind-borne debris region.

5. Condominiums with more than 200 units are not eligible for this program.

6. The loan program will be administered on a first-come, first-served basis.

Additionally, it allows insurers to increase statewide rates by 10 percent and repeals the requirement that, effective Jan. 1, 2010, sellers of property located in the wind-borne debris region and which has an insured value on the structure of $500,000 or more, provide prospective buyers the structure’s windstorm mitigation rating. Unfortunately, HB 1495 was also stripped of funding for the My Safe Florida Home hurricane mitigation program.

After passing the Statehouse on April 24^th by a vote of 75 Yeas vs. 33 Nays (12 not voting), it was sent to the Senate, substituted for SB 1950 on April 28^th and passed by a vote of 34 Yeas vs. 2 Nays (4 not voting). Following additional House and Senate amendments, the bill was revoted in both houses on May 1^st. The House passed the bill by a vote of 80 Yeas vs. 35 Nays (5 not voting) and the Senate passed it by 32 Yeas vs. 6 Nays (2 not voting). After ordered engrossed in the House, it was enrolled.

Attention!!!: On May 4^th, HB 1495 was engrossed a third time. Unfortunately, the Weatherization Program included in the April 24^th second engrossed bill (detailed above) was quietly omitted. As such, the May 7^th enrolled version sent to the Governor does not contain help for homeowners that need to mitigate against hurricane damage, only a green light for insurance carriers to hike rates. RIPPED AGAIN!

• Click Here for HB 1495 Page
• Click Here for HB 1495 Bill Text (2^nd engrossed version as of 4/24/2009)
• Click Here for HB 1495 Bill Text (3^rd engrossed version as of 5/4/2009)
• Click Here for HB 1495 Bill Text (Enrolled version as of 5/7/2009)

2009 Association Also-Rans

REP. KEVIN C. AMBLER

HB 27, filed by Representative Kevin C. Ambler in the Statehouse and its companion bill in the Senate, SB 2604 filed by Senator Andy Gardiner, propose a variety of changes to the chapters governing condominiums and mandatory homeowners associations. Basically identical to the measure that passed unanimously in both Houses in 2008 and vetoed because two sections dealing with swimming pool drains troubled the Governor, the new version removed those controversial provisions prior to filing.

SENATOR ANDY GARDINER

For Homeowner Associations: The legislation would clarify the times when board meetings may be closed to the homeowners; modify the procedures for accessing records of the homeowners' association and provides for the recovery of personnel costs incidental to record production; clarifies the voting process when it is done by secret ballot; requires newly-elected board members to sign a certification that they have read the community governing documents; and prohibits compensation of directors and officers of the association with limited exceptions. The legislation modifies the policies and disclosure requirements for homeowners' association reserve accounts; makes minor changes to the assessment guarantee requirements of the developer; and requires new disclosures for assessments by a community development district. The legislation would permit a fine of more than $1,000 against a parcel owner to become a lien against a parcel. For disputes in a mandatory homeowners association, the bill requires that they be either mediated or arbitrated prior to the filing of a complaint in circuit court.

For Condominium Associations: To provide collection relief for financially impacted associations, beneficial language includes providing condominium and homeowner associations with the ability to collect unpaid assessments directly from tenants and allows for the suspension of common facility use rights for condominium owners who are delinquent in the payment of their assessments. One strange provision required new board members to certify 30 days after election that they've read the declaration, articles of incorporation, bylaws and written policies. However, the bill doesn't delete the existing requirement for candidate certification forms, thereby requiring two certification forms expressing identical data. Is it possible that lawmakers neglect to read their own bills? As the session headed into the final week, lawmakers with tabled bills sought to find alternative vehicles for their derailed work product. HB 27 was hit with scores of amendments from April 22^nd to April 28^th, where it was awaiting consideration by several Senate Committees after passing an April 23^rd Statehouse vote by 115 Yeas vs. 2 Nays (3 not voting). Some of the controversial last minute amendments cost the bill support in the Senate, condemning it to oblivion.

• Click Here for HB 27 Page
• Click Here for HB 27 Bill Text (as of 4/24/2009)
• Click Here for SB 2604 Page
• Click Here for SB 2604 Bill Text (as of 4/15/2009)

SENATOR JEREMY RING

SB 998, filed by Senator Jeremy Ring, proposed a series of statutory changes for condominiums and homeowners’ associations. It provides that that certain condominiums need not retrofit the inside of units with fire alarm systems or smoke-detection systems if the structure has 1½ hour or higher fire-rated walls and is not a high rise building. The bill requires that a first mortgagee or its successor or assignee pay to the condominium association the lesser of the unit’s unpaid common expenses and regular periodic assessments which accrued or came due during the immediately preceding 6 months (12 months for a Homeowner Association) or 1 percent of the original mortgage debt within one year of a foreclosure filing. It repeals the requirement that certain multifamily dwellings have a least one elevator capable of operating on an alternate power source for emergency purposes.

REP. ARI ABRAHAM PORTH

Originally, the legislation had a simple companion bill in the Statehouse, HB 663, filed by Representative Ari Abraham Porth. As in its Senate companion, the House bill revises certain liability limitations of a first mortgagee or its successor or assignees who acquire title to a condominium unit or homeowners' association parcel by foreclosure or by deed. The obligation will be triggered after one year unless the unit is occupied by a unit owner petitioning for relief under chapter 13 or chapter 7 of the federal Bankruptcy Code.

As SB 998 evovled, it adopted provisions found in HB 831 and HB 1165, both sponsored by Representative James C. "Jim" Frishe. Despite SB 998 sailing unanimously through Regulated Industries and Community Affairs Committees by April 14^th, it lacked the juice to get through its remaining vetting obstacles by May 1, 2009, the session's operational clip date. Portions of Ring's bill were ultimately moved to SB 880, which also failed to pass muster.

• Click Here for SB 998 Page
• Click Here for SB 998 Bill Text (as of 4/3/2009)
• Click Here for HB 663 Page
• Click Here for HB 663 Bill Text (as of 2/26/2009)

REP. JULIO ROBAINA

Representative Julio Robaina's HB 1397 ceased progress on April 15^th. The original 184-page bill was replaced by a 190-page bill on April Fools Day. The massive bill is a chinese menu featuring some useful provisions blended with regulations of no ostensible benefit. Not unlike previous incarnations, the legislation contains scores of questionable "reforms" for which little or no rationale is provided. In compliance with Robaina's 2008 legislation, thousands of associations held expensive full membership votes to maintain staggered two-year terms for board members. Enigmatically, the current bill requires that the vote be repeated again this year. One regulation requires an association's members to set the dates and times for board meetings a year in advance with the proviso that any rescheduling would require majority approval of the entire membership. Scores of comparably cryptic statutory changes corroborate a disconnect with the operational realities impacting association functionality. Senate Bill 2302, a 175-page companion bill filed on February 26^th by Senator Rudy Garcia essentially mirrored Representative Robaina's HB 1397.

SENATOR RUDY GARCIA

Another provision would have created an investigative and law enforcement agency costing $1,849,484 in FY 2009-2010 and $1,517,790 as an annually recurring expense. Although legislative cost estimates reflect the initial hiring of 24 law enforcement professionals, attorneys, Investigative Specialists, Researchers, Administrative Assistants and auxiliary support staff along with 7 specially equipped vehicles (and vehicle maintenance), a more comprehensive analysis that incorporated the unit's operational expenses (commissioned consultants, court costs, arbitration and mediation expenses, travel, etc.) portends nearly $3 million annually - payable by association members. Assigned to investigate condominium and cooperative association offenses, these sworn law enforcement officers would be organized under a model otherwise used for beverage industry law enforcement.

Robaina's 2008 omnibus association bill (HB 995) vested the board of administration of a condominium association with broad emergency powers to contend with, for instance, the effects of a hurricane. It "can borrow, move money from reserves, meet without notice, evacuate the building and make emergency repairs." This year's bill reverses his emergency powers provisions of the previous year, insisting that "emergency powers may only be exercised during the term of the stated emergency unless more than 20% of the units are uninhabitable." For a hurricane or a flood, that limits the emergency powers to a 4 to 24 hour window during which an area is so characterized by the State - not much time to evaluate the damage, raise the funds, secure contractors and perform the repairs required to restore the building to pre-storm status.

When it became apparent by mid-April that burdening associations with expensive heavy handed regulations didn't resonate with thousands of associations across the state, Mr. Robaina attempted to redistribute scores of his provisions into surviving bills. While those regulations deemed reasonable were accepted, the majority were rejected by the bills' sponsors. As recently expressed by a New Port Richey legislator, "His attempt to dedicate an independent law enforcement agency to pursue a specific class of homeowner elicits visions of a special Guantanamo-style camp packed with decorating committee volunteers, building managers and board members held without trial. Next year's bill could add intelligence capabilities and shoot for expunging habeas corpus under a Patriot Act exclusion tailored for vertical communities." In summary, most of the positive aspects included in Representative Robaina's original legislation found homes in alternative bills.

• Click Here for HB 1397 Page
• Click Here for HB 1397 Bill Text (as of 4/1/2009)
• Click Here for SB 2302 Page
• Click Here for SB 2302 Bill Text (as of 2/26/2009)

SENATOR ELEANOR SOBEL

Senate Bill 664 (S8 664) by Senator Eleanor Sobel extends the deadline (for two years) from 2014 to 2016 for the requirement to retrofit condominium common areas with guardrails and handrails. Seeking to provide some financial relief to her elderly Hollywood condo constituents, Senator Sobel targeted these structures for minor upgrading delays. Its Statehouse companion bill, HB 1297 by Representative Elaine J. Schwartz, additionally postpones compliance with minimum firesafety codes until 2016. The House bill also exempts owners of certain apartment buildings or condominiums from requirement to install fire alarm system (as expressed in NFPA 101 - National Fire Protection Association (NFPA) 101, Life Safety Code, 2007 edition).

REP. ELAINE J. SCHWARTZ

Schwartz points out that the standards established by the National Fire Protection Association (NFPA) 101, Life Safety Code, 2007 edition, do not apply to structures that have direct access to the outside from each living unit or that are three or fewer stories in height. The bill sought to remove an expensive fire safety upgrade that was never deemed necessary and delay one that was. On March 3, 2009, the House bill was referred to the Military & Local Affairs Policy Committee; Insurance, Business, & Financial Affairs Policy Committee; Economic Development & Community Affairs Policy Council and the Policy Council. The Senate bill was sent to the Committees on Regulated Industries; Community Affairs; and Banking and Insurance. Neither bill was heard in any committee, and these bills were essentially considered Session casualties shortly after being filed. Sponsors were hoping to obtain a special waiver of the rules that might have resulted in their being granted a special hearing. Fat chance!

• Click Here for SB 664 Page
• Click Here for SB 664 Bill Text (as of 3/3/2009)
• Click Here for SB 2302 Page
• Click Here for SB 2302 Bill Text (as of 2/27/2009)

In Washington D.C.

BANKING COMMITTEE SENATORS CHRIS DODD AND RICHARD SHELBY FLUB COMPROMISE

Congressman John Conyers’ federal mortgage modification bill entitled H.R. 1106 - the “Helping Families Save Their Homes Act of 2009” was designed to assist, among others, homeowners carrying mortgage debt that exceeds the value of their property. A proposal to imbue bankruptcy judges with the power to alter mortgage terms in bankruptcy court threatened to eliminate an association’s right to collect past due assessments from owners. The resulting shortage would have to be offset by incrementally assessing all the association’s members. Squarely in the Washington D.C. and national media spotlight, the controversy over this issue went unresolved, despite pressure from Senate leaders to formulate an acceptable compromise. They failed. The bill is frozen solid in the Senate footlocker.

On April 30^th, Senator Dick Durbin proposed Senate Amendment 1014 (SA 1014) to S. 896 - the "Helping Families Save Their Homes Act of 2009" (a Senate bill considering similar issues in the House Bill H.R. 1106). The amendment contained the compromise that Senate leaders hoped would lead to consensus. The amendment would need 60 Senators to endorse inclusion (3/5 of the Senate). The full Senate rejected the amendment by a vote of 45 Yeas vs. 51 Nays (4 not voting).

The underlying reason for this bill's demise was NOT the Senate's failure to achieve a consensus. It was NOT because thousands of association members from all parts of the country bitterly complained about the prospect of Bankruptcy Court decisions intensifying their fiscal burden. It was pressure from the most powerful lobby in Washington. Although they clearly helped precipitate the nation's financial crisis, the Banking Lobby has never been a more potent legislative influence. Flush with billions in federal "recovery" dollars, they condemned the bill and sealed its fate. However, since Congressional mechanics are as clear as mud, if the bill starts showing signs of life, we will take another look.

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Make Your Voice Heard
Alert Our Florida Representatives and Senators

To send emails to any or every Senator and any or every Statehouse Representative, first go to the Community Advocacy Network (CAN) web site and login using your email address and Password: 35707. Then Click on Capitol Connection on the left sidebar. The rest is intuitive! Click Here to CAN Member Login.

If you prefer, you can send emails the old fashioned way to:

• Representative Ellyn Bogdanoff by Clicking Here
• Senator Dennis Jones by Clicking Here
• Senate President Jeffrey Atwater by Clicking Here or
• Statehouse Speaker Larry Cretul by Clicking Here

CONGRESSMAN JOHN CONYERS

April 13, 2009 - Community Associations that have been anticipating relief from lawmakers in Washington and Tallahassee may be headed for an exercise in disappointment. Congress is considering John Conyers’ federal mortgage modification bill entitled H.R. 1106 - the “Helping Families Save Their Homes Act of 2009”. The bill, expected to reduce direct spending by about $27 million from 2009 to 2014, is designed to assist, among others, homeowners carrying mortgage debt that exceeds the value of their property. Already passed in the House, the banking lobby is making a run at the legislation in the Senate. A proposal to imbue bankruptcy judges with the power to alter mortgage terms in bankruptcy court threatened to eliminate an association’s right to collect past due assessments from owners. The resulting shortage would have to be offset by incrementally assessing all the association’s members.

SENATORS CHRIS DODD AND RICHARD SHELBY

After being stalled in the Senate, Senate Minority Leader Mitch McConnell and Senate Majority Leader Harry Reid agreed to stop bickering and write a bipartisan compromise plan. Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, and the panel’s top Republican, Richard Shelby of Alabama, are to write a new, bipartisan bill that will be substituted for the current proposal. Reid said it will be up to Dodd and Shelby to decide whether to include the bankruptcy provisions in the compromise plan. Just before April Fool’s Day, the chamber voted 94 to 1 to move toward final consideration of the bill. Condo and coop owners need to watch this legislation to avoid being judicially encumbered with their neighbor's debts.

GOVERNOR CRIST AT TOWN HALL MEETING

When Governor Charlie Crist held a Town Hall style meeting to address local concerns at the Beach Community Center on February 18^th, hundreds of attending residents cheered for more than 5 minutes following his statement that the Calypso gasworks has been “put to bed. It’s gone!” With Calypso no longer an issue, the Governor called on L’Hermitage I Manager Patricia Quintero, who complained about delays to the planned beach renourishment and the additional financial burden placed on condo owners when maintenance liabilities from foreclosed units are incrementally assessed to the other owners.

When tens of thousands of “no money down”, “deferred interest”, and “negative amortization” mortgages simultaneously turned terminally toxic, droves of homeowners abandoned their suddenly unaffordable properties to bank foreclosure. Since the mortgage debt in these foreclosures exceeded the collateralized property value, every foreclosed home meant more red ink in the foreclosing bank’s portfolio. Choked by the tidal wave of unwanted properties, they developed a “foot-dragging” strategy to help mitigate the pain. By instituting a deliberately dilatory foreclosure policy, bankers could temporarily postpone recording the losses.

This scenario portends disastrous consequences for common interest communities. Under current law, a bank that obtains title to a condominium unit as a result of a foreclosure pays only six months unpaid common expenses and regular periodic assessments or 1% of the original mortgage amount, whichever is less. (For Homeowners Associations, banks are on the hook for twelve months or 1% of the original mortgage amount). By slowing the foreclosure process to forestall losses, banks further deprive associations of the minimal relief provided for in current statute. As a result, associations suffering from a substantial number of foreclosures are realizing enormous losses. In many cases, they’ve been forced to levy special assessments to cover the shortfall.

SENATOR JEREMY RING

To help address the foreclosure shortfalls, Senator Jeremy Ring’s SB 998 states that “If a first mortgagee or its successor or assignees has not acquired title to an owner-occupied parcel one year after a foreclosure action is filed, the first mortgagee or its successor or assignees shall pay to the association the lesser of the parcel’s unpaid common expenses and regular periodic assessments which accrued or came due during the immediately preceding 6 months or one percent of the original mortgage debt.” Ring’s bill restricts the bank’s foreclosure foot-dragging to one year.

SENATOR MIKE FASANO

In SB 880, Senator Mike Fasano adds “special assessments” to the unpaid “common expenses and regular periodic assessments” that the bank must pay to the association upon foreclosure and increases the liability period from 6 to 12 months. It also increases the payment alternative - 1% of the original mortgage amount - to 20%. Additionally, failure to pay within 30 days of acquiring title will entitle the association to recover all outstanding special and regular assessments that became due before the acquisition of title.

In a recent alert from the Community Association Leadership Lobby (CALL), a community association lobbying and legislative watchdog organization underwritten by association law firm Becker & Poliakoff, their Co-Executive Directors Yeline Goin and David Muller warn, “At the beginning of the legislative session, there were a number of bills filed to address this situation. However, the leadership in the legislature has made it known that these bills will not move as long as there is any language requiring banks to pay more than what is currently provided for in the statute. In other words, the banking lobby, fueled by billions of dollars in federal bailout money, has pressured the legislators into preserving the status quo.” In short, unit owners are being forced to subsidize the bank’s ownership obligation following a foreclosure.

SENATE PRESIDENT JEFFREY ATWATER

Associations will continue to face significant losses of revenue and the inability to fund their budgets until the legislature protects unit owners from having to subsidize bank-owned units. To help dislodge these bills, send an email to the Senate leadership, including:

• Senate President Jeff Atwater (atwater.jeff.web@flsenate.gov)
  312 Senate Office Building
  404 South Monroe Street Tallahassee, FL 32399-1100; (850) 487-5100.
• His district office is located at 824 US Highway 1, #210
  North Palm Beach, FL 33408; 1-866-757-1902.

• Senator Garrett S. Richter, (richter.garrett.web@flsenate.gov)
  c/o of the Senate Banking and Insurance Committee
  310 Senate Office Building
  404 South Monroe Street, Tallahassee, FL 32399-1100, (850) 487-5124.
• His district office is located at Building F, Suite 203, 3301 E. Tamiami Trail
  Naples, FL 34112-4961; (239) 417-6205.

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