Saturday, January 22, 2011

Collecting Fees from HOA Deadbeats

Many of us bought our homes to live in them. Others purchased theirs as investment properties. Most pay their HOA dues just like the rest of us. Some do not. A few have run thousands of dollars behind — even as they collect rent from tenants.

A Florida law passed last summer gives the HOA power to fix that. It allows the HOA to have the tenant pay rent directly to the HOA to collect HOA fees that the unit owner should be paying. St. Charles Place HOA is beginning to put this tool to work.

It is important to remember that the renter is almost always an innocent bystander caught in a situation that he did nothing to cause. Renters are our neighbors and we want the HOA board to work with them as allies in a cause rather than adversaries, though the law allows the HOA to evict renters who do not cooperate.

This new rule is just a tiny subsection of a huge law that governs homeowners associations in Florida. You can download the entire thing here.

On page 46 of 103 of the PDF Florida law SB 1196, subsection 11 of section 718.116 states:
If the unit is occupied by a tenant and the unit owner is delinquent in paying any monetary obligation due to the association, the association may make a written demand that the tenant pay the future monetary obligations related to the condominium unit to the association, and the tenant must make such payment. The demand is continuing in nature and, upon demand, the tenant must pay the monetary obligations to the association until the association releases the tenant or the tenant discontinues tenancy in the unit. The association must mail written notice to the unit owner of the association’s demand that the tenant make payments to the association. The association shall, upon request, provide the tenant with written receipts for payments made. A tenant who acts in good faith in response to a written demand from an association is immune from any claim from the unit owner.

(a) If the tenant prepaid rent to the unit owner before receiving the demand from the association and provides written evidence of paying the rent to the association within 14 days after receiving the demand, the tenant shall receive credit for the prepaid rent for the applicable period and must make any subsequent rental payments to the association to be credited against the monetary obligations of the unit owner to the association.

(b) The tenant is not liable for increases in the amount of the monetary obligations due unless the tenant was notified in writing of the increase at least 10 days before the date the rent is due. The liability of the tenant may not exceed the amount due from the tenant to the tenant’s landlord. The tenant’s landlord shall provide the tenant a credit against rents due to the unit owner in the amount of monies paid to the association under this section.

(c) The association may issue notices under s. 83.56 and may sue for eviction under ss. 83.59-83.625 as if the association were a landlord under part II of chapter 83 if the tenant fails to pay a required payment to the association.

Some opinions from law firm blogs here in Florida:

http://cuevaslaw.wordpress.com/2010/08/19/95/


This one indicates that the HOA could go after past overdue HOA fees: "The recent changes to the law allow an Association to demand that renters pay all rents directly to the Association in the event that the unit being rented is behind in their maintenance, until the delinquency is cured." However the law's wording "that the tenant pay the future monetary obligations..." contradicts that.

http://www.rkayelaw.com/tags/60/sb-1196


A new subsection (11) has been added to Section 718.116, which provides for the authority of an association to collect rent from a tenant occupying a unit that is delinquent to the Association in any monetary obligation. The association is required to make written demand on the tenant, with a copy to the unit owner, and may only collect rent to the extent of the unpaid monetary obligation to the association. If the tenant does not pay, the association may evict the tenant as if the association was the landlord. However, the statute does not provide for the ability of the association to assess the costs involved against the unit. It also contemplates the possibility of a receiver collecting the rent.

http://www.mondaq.com/unitedstates/article.asp?articleid=103018

A new Section has been added (Section 718.116(11) – Tenants to Pay Rent to Association) which states that if a unit is occupied by a tenant and the unit owner is delinquent in paying any monetary obligation due to the association, the association may demand in writing that the tenant pay all future rents and other monetary obligations related to the unit directly to the association. The association must provide written notice to the unit owner of the association's demand on the tenant. The tenant must comply with such demand until the association releases the tenant or the tenant ceases to occupy the unit. If the tenant fails to direct the required payment to the association, the association has the power to issue notices under Section 83.56 and may sue for eviction under Chapter 83 as if the association were a landlord under Part II of Chapter 83.1

http://www.lawyerspedia.com/Legal-News/Florida-Condominium-Law-Updated.html

Florida Statute 718.116(11) Tenants who occupy a condominium unit must pay the condominium association upon written demand by the association, monies owed to the unit owner directly to the association instead if the unit owner is delinquent in payments to the association. To enforce this right the association must mail written notice to the unit owner of the association's demand that the tenant pay the association directly. A tenant who acts in good faith paying such monies to the association is immune from any claim from the unit owner. If a tenant fails to pay the monies to the association after proper demand, the association is allowed to file an eviction action as if the association was the landlord.

More resources:

http://www.floridacondohoalawblog.com/2010/06/articles/assessmentscommon-expenses/condos-hoas-and-coops-will-have-the-ability-to-demand-rent/

http://www.houselogic.com/articles/delinquent-hoa-fees-how-collect/

http://www.sunshinestatenews.com/story/condo-associations-put-hammer-down-renters

http://yourorlandoconsultant.wordpress.com/2010/07/28/hoas-may-collect-past-dues-from-tenants-in-florida/

http://www.floridacondohoalawblog.com/tags/hoa-law/