Presentation by William D. White, Chairman CAI-FLA and President of CAI South Gulf Coast Chapter at a Town Hall Meeting hosted by Commissioner Jerry Libbin on 12-14-2009 Loew’s Convention Center, Miami Beach.

It is my hope and the hope of thousands of condominium owners across the state that during the next session of the legislature they will once again consider an amendment to:

Florida Statute 718.116(1)(b)2 which currently caps the payment that is required by a foreclosing first mortgage holder to 1% or 6 months of past due regular assessments which ever is less. I recently had a bank foreclose on a unit that owed $13,000 in Special and Regular Assessments but the original mortgage amount was $75,500. The bank only paid $750 while the rest of the homeowners shared in the unpaid $12,250. This statute needs to be amended to better reflect the costs incurred by the Association to maintain the common elements to the community, which increases the value of the foreclosing first mortgage holder’s property. Additional burdens on the remaining homeowners will only cause additional foreclosures and or deterioration to the common elements. CAI-FLA has recommended this cap be raised to 12 months of both Regular and Special Assessments and dropping the 1% completely. There is also NO penalty in place for the foreclosing party dragging its feet in making the capped payment. The statute should require payment within 60 days of taking title or incur a stiff penalty such as paying all the unpaid assessments of the previous owner. The banking industry will again try to derail any changes to 718.116. It is imperative that the community associations get some relief from the statutory cap, after all, the banks received millions of dollars in TARP money from the federal government to offset their losses and the community Association who are struggling to keep the common areas maintained need relief which can only be accomplished by changing the statute. Without relief there is surely to be thousands more of unnecessary foreclosures as associations continue to drown under the mountain of bad debt caused by the statutory cap.

The passage of HB995 in 2008 caused a substantial number of problems to the condominium statute that continue to go uncorrected since the legislature failed to pass one bill that made constructive changes or corrections to the problems created in 2008. To name two issues still awaiting correction:

Insurance requirements in 718.111(11), The Board of Directors was given the ability to force place insurance on condominium owners who do not have a homeowner policy as well as requiring the Association be named as an insured loss payee on the homeowners policy.

Board of Director Eligibility requirements in 718.112(2) (d) does not permit Condominium owners that own more then one unit in a community from serving on the Board of Directors at the same time. Every unit in a condominium should be allowed to nominate one candidate (owner) from each unit to be considered for election and regardless of their martial situation or living arrangements be allowed to serve on the Board of Directors if properly elected or appointed to the Board of Directors.

The current legislation that has been proposed to correct 718.116 is HB 329 which contains many disturbing passages that will create new problems - such as requiring an estoppel letter when the mortgage company files it’s foreclosure notice and to pay 6 months assessments even if the homeowner is not delinquent yet, a failure to request the estoppel will negate the foreclosure action and it makes a tenant responsible for expenses incurred by the homeowner including attorney fees and court costs

The Community Association Institute Florida Legislative Alliance in cooperation with CALL and CAN are working to make the Florida Bars Omnibus Bill a reasonable fix for the problems created in 2008 and to the collection issues currently being faced due to the cap on mortgage liability. I hope you will consider supporting legislation that is favorable to Community Associations during the next legislative session. I strongly encourage the legislators present to look to CAI for advice and direction from the hundreds of thousands of homeowners and members of the Community Association Institute through the COMMUNITY ASSOCIATION INSTITUTE’s FLORIDA LEGISLATIVE ALLIANCE.

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The web site is being updated and now has a Library feature for items such as State Statutes, Proposed legislation, Administrative Codes from DBPR and training manuals used in the free DBPR/CAI courses. This feature will be avaiable to anyone visiting the site.

There is a Board of Director section which has been developed and will contain Board information to help Boards with their decision making responsibility. Agendas and research information will be posted for Board review as it becomes available. Each Board member will be assigned a password by PCS. Passcodes will be assigned to Board Members in early 2009.

Bill White