Call to Action - Proposed Legistlation
By: Candice Gundel
The 2015 Legislative Session has begun in Tallahassee. There are a number of proposed Bills that, if passed, will effect community associations, their managers, attorneys, and other vendors. Some of the proposed Bills will improve the standing of community associations when it comes to the administration of the association as well as the collection of assessments from owners and foreclosing mortgagees. I write this month to inform you of a Bill that has alarming potential negative impacts throughout the community association industry and ask for your help in making the Legislature aware of our concerns.
House Bill 611 and its companion Senate Bill 736 were introduced to the Florida Legislature last week. Both Bills propose significant changes to the process, costs, and effect of estoppels issued by an association, its manager, or its attorney. Estoppels and the fees that can be charged are currently regulated by Florida Statute. An estoppel is a legal document which outlines a property’s financial standing in the association, future assessments coming due, and violations, if any. Once issued an estoppel binds the association to the amounts/provisions stated in the estoppel until the estoppel expires. Bullets of the significant proposed changes in the Bills are provided below, as well as a link to the full text of the Bills. We are asking for your assistance to contact your Legislator as well as the members of the Committees currently considering the Bills to voice your concerns. Attached you will find information on who and how to contact your Legislator.
· The proposed Bills impose a maximum estoppel fee of $100 - $150. The preparation of an estoppel is a detailed process where the time, labor, and experience needed to correctly protect the association’s interest and produce a correct estoppel exceeds the proposed maximum fee. If the fee is not able to be collected for the service rendered the additional costs will have to be shifted to the association. Estoppel fees are currently regulated by Florida Statute and range from $150 - $350 depending on the complexity of the document.
· The Bills propose to eliminate the ability of an association, manager, or attorney to collect an estoppel fee prior to the closing of a property and provide only limited recourse for the collection of the fee should the closing not occur. Again, if the fee is not able to be collected for the service rendered the additional costs will have to be shifted to the association.
· The Bills add the requirement all estoppels to be valid for 30 days from their issuance and does not allow the association, its manager, or attorney to collect additional assessments, fines, costs, or attorney’s fees that accrue within that 30 day time period.
· The Bills reduce the number of days an association has to respond to an estoppel request from 15 to 10 days. In complex estoppels where a property is in violation of the governing documents, is engaged in litigation, or is delinquent in monies owed to the association the diligent preparation of an estoppel often exceeds 10 days.
· The Bills impose an additional penalty if an association is not able to provide an estoppel within 10 days of the request. Namely it states the association waives its right to collect the balance currently due from any person who could have relied “in good faith” on the estoppel.
To access the current version of House Bill 611: http://www.myfloridahouse.gov/Sections/Documents/loaddoc.aspx?FileName=_h0611c1.docx&DocumentType=Bill&BillNumber=0611&Session=2015
To access the current version of Senate Bill 736: https://www.flsenate.gov/Session/Bill/2015/0736/BillText/__/PDF
To find your State Senator please follow the link: http://www.flsenate.gov/senators/find
To find your State Representative please follow the link: http://www.myfloridahouse.gov/sections/representatives/myrepresentative.aspx