» Lease addendum – Many associations have the right under their governing documents to require the execution of a uniform form of lease or uniform lease addendum (“lease addendum”). Such lease addendum could provide the association with the right to collect rental payments from tenants in the event that the owners become delinquent in the payment of their assessments. The lease addendum could further include a provision providing the association with the direct right of eviction in the event the tenant fails to remit his rental payment to the association.

» Personal Judgments – Chapters 718 and Chapter 720, Florida Statutes, governing condominium associations and homeowners associations, respectively, provide associations with the power to seek a personal judgment against an owner that is delinquent in the payment of assessments. The associations’ right to seek a personal judgment against delinquent owners is in addition to the associations’ right to file and foreclose on a claim of lien for such unpaid assessments.

» Amending governing documents – While some governing documents provide the association with the power to collect rental payments directly from tenants when the owners are delinquent in the payment of their assessments, others do not. If the association’s governing documents do not provide the association with such authority, the board of directors may wish to consider amending the association’s governing documents to include such provision. Such provision would obviate the need to require a lease addendum.

» Petitions for the appointment of a receiver to collect rents- The collection crisis being experienced by associations is magnified by owners who are leasing their homes, collecting rents, and refusing to pay assessments on same. Pursuant to Chapters 718 and 720, Florida Statutes, an association may seek the appointment of a receiver against an owner during the pendency of a foreclosure action. By seeking to have a receiver appointed, the association can employ the powers of the court to collect rents from those homes occupied by tenants, which are delinquent in the payment of assessments and return to have a positive cash flow to properly fund and operate their community.

» Motions to Compel Banks to Proceed with Mortgage Foreclosure Complaint or to Commence Paying Monthly Assessments Due to Association– It is unfair and inequitable for a bank to unreasonably delay their foreclosure actions, thereby causing the assessments owed to the association to continue to accrue. By moving to compel banks to proceed with their case when they have unreasonably delayed their foreclosure actions, we have been successful in obtaining orders from the court requiring the banks to proceed with their case in a diligent and expeditious manner. Such orders alleviate delays in cases and may lessen the impact felt by associations unable to collect assessments during the time the foreclosure case is pending.

If you feel that your community would benefit from any of the foregoing alternatives, or if you would like to further discuss the benefits they may provide for your community’s collection efforts, please contact our office so that we may discuss how they may address your community’s needs.

CAVEAT EMPTOR
(“Buyer Beware”)

We would like to take this opportunity to caution association managers and directors to closely examine the engagement letter proposed by any law firm seeking to acquire new association clients. For example, some believe they will not be charged for certain services while the written engagement letter contains language to the contrary and that they will be charged “only costs” even though a mark up profit to the amount of such “costs”, is charged. Other associations have been enticed by the allure of creative legal strategies to collect upon assessments without their lawyers having fully explained the process and legal ramifications to the community’s management or board and without any noted improvement in the association’s delinquency status once the legal strategy has been implemented.

In providing top-notch legal services for our clients, our firm charges competitive rates contained in our legal engagement letters. Our firm has always adhered to the highest standards of ethics while rendering legal services and advocating on our clients’ behalf. If you have any questions concerning our services or our rates, please call us to discuss. We look forward to continuing to provide quality legal services to your community in the future.

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