Florida HOA Lawyer Blog

Recent Articles Discuss Association Reserves, Member Directories, Lender/Foreclosure Stalling Remedies, and Other Important Topics

The South Florida community association attorneys with our firm take great pride in serving as a source for authoritative and insightful information on the issues affecting condominium, homeowners', cooperative and commercial associations in the State.

A few of the topics that I've recently covered, along with the links to the complete articles, include:

• Bank Foreclosures Taking Forever? - There are some simple strategies that community associations can use to make sure that lenders' foreclosures lead to timely sales of the foreclosed properties. This article explains several strategies to consider. [Full Story]
• Reserves, Reserves, Reserves - This article offers a few helpful hints for condominium and homeowners associations to consider in the budgeting of their reserves. [Full Story]
• Can We Still Publish Our Membership Directory? - Changes based on last year's Condo and HOA Acts in Florida have led to questions as to whether community associations can publish the phone numbers and e-mail addresses of their members as part of their membership directories. This article examines the issue. [Full Story]

I will continue to post summaries and links to my column from the Palm Beach County Condo News in our blog on a regular basis. Be sure to submit your e-mail address in the box on the right to receive all of our blog posts. Of course, you are able to opt out at any time.

The recession and slow pace of economic recovery have taken a heavy toll on the finances of individuals in South Florida and throughout the country. With many finding themselves forced to file for bankruptcy, the wave of personal bankruptcies has exacerbated the financial difficulties at condominium associations and HOAs that were already struggling with their collection efforts due in large part to the foreclosure epidemic. As a result, the community association lawyers in South Florida at our firm and throughout the state have been working closely with their clients to help them to contend with unit owners who seek bankruptcy relief.

Typically, there are two types of personal bankruptcies that unit owners may file: Chapter 7 and Chapter 13. When an owner files bankruptcy, the "automatic stay" is triggered upon filing which requires that all collection efforts by any of the owner's creditors must immediately cease. That means if an association is in process with a lien foreclosure action at the time when the unit owner files bankruptcy, then the foreclosure action must come to a halt unless and until the bankruptcy court authorizes the foreclosure to be reinstated during the pendency of the bankruptcy case.

In Chapter 7 bankruptcies, the unit owners will either stay current with their payments to their mortgage lender and the association in order to keep their residence, or they will cease making their payments and give up possession and title to the residence to their lender. If the owner is delinquent at the time of the filing for bankruptcy, then the association may request what is called "stay relief" from the bankruptcy court in order to either proceed with or commence a lien foreclosure action against the unit. However, the bankruptcy filing will prevent the association from obtaining a money judgment against the owner if the owner receives a Chapter 7 discharge of his or her debt to creditors. For an individual to receive a discharge of his or her obligations in a Chapter 7 bankruptcy, the process takes approximately four months. However, should the owner attempt to remain current with the obligations to the association in order to maintain ownership of the unit, once the discharge is entered, the "automatic stay" against collection actions is removed and the association may undertake a lien foreclosure and collection action against the owner should the owner become delinquent in payment post-discharge.

In Chapter 13 bankruptcy filings, the process is designed to afford the owner the ability to "catch up" and save their home by curing all arrears due to their mortgage lender and the association through a repayment plan. Usually, the repayment plan lasts five years and the owner is required to cure the arrears within the five year plan and pay all of the regular monthly maintenance and special assessment payments that come due after the date of the bankruptcy filing. The five year plan proposed by the owner must receive court approval.

An important and perhaps difficult note for associations in the Chapter 13 process is what is commonly referred to as "lien stripping." If the owner's unit is determined by the bankruptcy court to have a value less than what is owed to the first mortgage lender, then Chapter 13 allows the owner to "strip off" and avoid all junior mortgages (second mortgages and/or home equity lines of credit) and any association lien that existed of record at the time of the bankruptcy filing. While this appears as a harsh result to associations, the one element in the association's favor is that the owner must pay all maintenance and special assessment payments that come due from the date of the bankruptcy filing forward. In other words, despite the avoidance of the junior liens, if the owner elects to retain ownership of the residence, then the owner must start paying the monthly association fees and mortgage payments going forward from the date of the bankruptcy filing.

For the community associations with unit owners who file for Chapter 7 or Chapter 13 bankruptcy, it is essential that they work with a qualified and experienced bankruptcy attorney who can guide them through the collections process for these individuals. Our attorneys will continue to monitor and write about community association matters, and we encourage you to submit your e-mail address in the box on the right in order to automatically receive all of our future blog posts.

By Vincent B. Flor

As the foreclosure crisis begins to unwind, short sales have proven to be one of the most popular types of foreclosure avoidance measures for banks and homeowners in South Florida. For community associations, these transactions, in which the bank agrees to accept less than what it is owed, can bring new buyers for properties whose existing owners have typically not been paying their maintenance fees and assessments. There are many reasons for community associations to accept short sale proposals when they arise, but the attorneys who focus on working with South Florida condominium and homeowners associations at our firm are advising and working with many associations to explore possibilities for counteroffers with higher payments for past-due fees to the association.

When a short-sale transaction is negotiated between a lender and their borrower/homeowner, the community association, which is also a lienholder on the residence for past-due assessments, will usually be asked to approve the transaction. The association is typically offered to accept just a fraction of what it is owed, since banks understand that the association will be highly incentivized to replace the delinquent property owner with a new buyer who will presumably begin paying monthly assessments accruing after they become the new owner. If the association does not accept the offer and approve the deal, then the transaction will probably not be finalized and the bank must continue with its foreclosure proceedings against the property.

However, for community associations which believe that they would be better served by risking the delay that the foreclosure process presents rather than accepting an offer that they believe is too low, a counteroffer for a greater amount that they would be willing to accept for the short-sale transaction can and should be made. In many cases, the bank, seller, buyer and brokers are also very eager to see the sale finalized, and they may be willing to make additional financial concessions to the association in order to get the deal done. The key for the association is to understand and work within their level of risk tolerance for the sale being scrapped and the unit going through the foreclosure process.

Our community association lawyers are working closely with South Florida condominium and homeowners associations to help them understand and assess their options in making counteroffers in short-sale transactions. We write about issues such as this on a regular basis, and we encourage the members, directors and managers of Florida communities to submit their e-mail address in the box on the right in order to receive all of our future blog posts.

By Ivette Machado and Caridad Rusconi

One of our firm's most popular seminars for community associations during the last year has been our presentation called "Service Animals and Your Community, Necessity or Exploitation." Our attorneys who focus on community associations in South Florida have worked with many local HOAs and condo associations to help them to develop and implement their policies regarding service animals in accordance with the law, and we are now offering this seminar as a complimentary public service for communities and property managers.

The seminar covers how the Fair Housing Amendments Act of 1988 prohibits discrimination against the disabled and mandates that properties must make "reasonable accommodations in rules, policies, practices, or services, when such accommodations may be necessary to afford such person equal opportunity to use and enjoy a dwelling." We discuss the definitions of a handicap under the law and review several landmark cases and decisions. The presentation goes into detail on the elements of an FHA claim and how the courts have ruled on the definition for a service animal. It also covers how associations may request that the healthcare provider of the disabled resident complete a Reasonable Accommodation Request Verification Form.

The seminar concludes with a discussion of exactly what constitutes a "reasonable accommodation," which must be determined on a case-by-case basis by evaluating the benefits and costs of the accommodation. Permitting a handicapped individual to maintain a service-animal or pet would, in most cases, constitute a reasonable accommodation. We also discuss examples of cases in which there is no discernable disability, e.g., depression, post-traumatic stress disorder, anxiety disorders and autism, and we explore questions pertaining to policies for service animals in the pool area, fitness center or other community amenities.

The issues surrounding service animals for the disabled are important considerations for South Florida condominium associations and HOAs, and we are pleased to offer and conduct this informative seminar which also qualifies for 1.5 hours of continuing education CAM credits for property managers. Contact us at 1-800-737-1390 or via e-mail at info@siegfriedlaw.com to inquire about the possibility of scheduling the seminar, and be sure to enter your e-mail address in the box on the right to automatically receive all of our future blog posts.

Every year our firm and attorneys support important and worthwhile organizations, and this year we are pleased to serve as an "Comic Relief Sponsor" for the Crohn's & Colitis Foundation of America's 2nd annual "Comedy Night," which marks the start of the Fort Lauderdale edition of Take Steps, the CCFA's largest annual fundraising event.

The kick-off event, which will feature hilarious comedians and fantastic raffle prizes, will take place at the Improv Comedy Club at the Seminole Hard Rock Hotel & Casino in Hollywood on Wednesday, Feb. 16, from 6-9 p.m. Last year's event raised more than $24,000 for the organization, which focuses on funding research to find a cure for Crohn's disease and ulcerative colitis, and on improving the quality of life of children and adults affected by these diseases.

Click here to learn more or purchase tickets, which are only $25 and benefit CCFA, or call Liz Korfin for more information at (305) 218-5369.