Saturday, June 12, 2010

Big changes for condos on July 1

The new Distressed Condominium Relief Act signed into law by Governor Crist on June 1 will take effect on July 1. There are provisions within Senate Bill 1196 that will have a significant impact on almost all Florida condo associations. Some highlights of the Act are;

Lenders liability for past due assessments in foreclosure

Lender's (First Mortgagee) liability for unpaid assessments when acquiring title through foreclosure or deed-in-lieu after July 1, 2010 is increased to the lesser of 12 months unpaid assessments or 1% of the mortgage debt. This is an increase from the lenders' current 6 months liability and a welcome aid for troubled associations with multiple foreclosures.

Association's right to collect rent from delinquent units

If a condominium-unit owner is more than 90 days delinquent in paying monetary obligations to the condominium association, the bill authorizes the condominium association to require that the condominium-unit owner's tenant, in lieu of paying rent to the unit owner, pay the rent directly to the condominium association to cover a unit owner's delinquent monetary obligations to the condominium association. This will put a halt to the all-too-common practice of unit owners collecting rent while not paying condo dues (and often not
making mortgage payments as well).

Delinquent owners banned from the pool.
In addition to authorizing fines, a condominium association is authorized to suspend the right of a unit owner to use the common elements, common facilities or other association property until such unit owner has paid the required assessments (maintenance), as well as suspend the voting rights of the delinquent unit owner. This applies to any "monetary obligation" that is more than 90 days delinquent. It also extends to the unit owner's tenants, guests and invitees.

Fire Sprinkler System

The bill states that a condominium association cannot be required to retrofit its fire sprinkler system before the end of 2019 (instead of 2014). The association may still vote to forego retrofit. Buildings of less than four stories with exterior walkways providing egress are exempt.

There are several other provisions but these are the ones that will apply to the greatest number of associations in the Cocoa Beach and Cape Canaveral area. A complete synopsis of the bill can be read at Donna DiMaggio Berger's excellent
condo law blog.

"Sometimes not getting what you want is an amazing stroke of luck."_________the Dalai Lama