Distressed Condominium Relief Act
Gov. Charlie Crist signed
into law a measure Tuesday that will allow Florida's beleaguered condominium
associations to go after up to twice the amount of delinquent dues owed
Condo associations had previously
been limited to six months' worth in most cases.
When the law takes effect
on July 1, associations also will be able to deny owners who owe money
access to pools or other common-ground amenities.
Other provisions of the "Distressed
Condominium Relief Act" let an association either delay or discard some
previously required -- and very costly -- upgrades to a building's fire
alarms, sprinklers system and elevators.
The new law is another government
effort to help Florida's condo associations recover from a years-long slide
in revenue from dues, plummeting unit values and declining occupancy rates
as foreclosures ran rampant in the wake of the real estate downturn.
"It has been such a worst-case
scenario for the people who live in those buildings, so this is a very
good thing," said Ryan Carson, a sales agent with Re/Max Premier Services
on condo-laden Siesta Key. "This will be a good shot in the arm."
During the housing boom there
was no hotter commodity. At the height of frenzied buying, people stood
in long lines just for a chance to put a deposit down and secure a unit.
Often the unit was immediately resold, or flipped, several times for a
profit. Hundreds of traditional apartment buildings across the state were
converted to condos.
The deflation of the market
also was felt most strongly in the condo market, which has been hit by
waves of defaults. Investors walked away from units bought at inflated
prices and stopped paying dues.
Association advocates claim
that many banks have been slow to complete foreclosures to avoid having
to pay back dues and maintenance costs, leading to a downward spiral.
"For condominiums and homeowner
associations struggling with very high delinquencies, this will allow them
to collect rent from tenants in delinquent units and homes without having
to go to court," said Donna D. Berger, executive director of the Community
Advocacy Network. "For failed condominium conversion projects, this will
hopefully encourage investment in these communities."
Stephen Demchak, treasurer
of the Second Bayshore Condominium Association in Bradenton, said the new
law will help associations the most by making banks pay up to one year's
worth of back dues when they foreclose.
"It has evened up the playing
field considerably," Demchak said. "But we still need to come up with a
method where the banks must complete their foreclosures in a much quicker
Demchak said his condo complex
was completely occupied and nearly foreclosure-free before the downturn.
Speculator-fueled buying pushed occupancy rates down to as low as 85 percent
during the last two years as many investors abandoned their units.
"When you're missing two
years of association fees, that puts a real strain on the budget," he said.
"If this goes on any longer we are going to have to go to a special assessment."
Source: Sarasota Herald Tribune,
1st June 2010
Writer: Tom Bayles