Alternative Solutions to the Collection Crisis  During these difficult economic times, many associations are struggling to stay afloat given the soaring number of owners that are failing to pay their maintenance assessments. As a result, associations are being forced to consider alternative means of collecting unpaid assessments outside the normal practice of filing and foreclosing on a claim of lien. As a market leader in representing community associations in South Florida, Siegfried, Rivera, Lerner, De La Torre and Sobel, P.A. has established a reputation of integrity while proactively trying to obtain the best result for our clients. In our continued efforts to provide our clients with the best available legal representation, our office has been working closely with our clients to provide the following alternative solutions to the collection crisis.
» 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. |
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Rembaum's Association Roundup
The Marseilles case could be of valuable assistance to associations who are stuck with partial completion of their condominium buildings or repairing construction defects left behind by troubled developers, or both. Say your developer was a single purpose entity, who when the going got tough, not only got going, but dissolved its entity leaving the Association in a lurch. Piercing the corporate veil from the single purpose entity to the affiliate parent company is an up hill and extremely costly and risky approach. Now, under the right circumstances, there may be another remedy for your association: invoking the contractor’s surety bond as a successor to the developer. There is even a statutory prevailing party attorney fee provision. |
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If you live in a recently constructed condominium building you will absolutely want to read this article. It explains how, under the right circumstance, to invoke the contractor’s “surety bond” to pay for repairing your condominium’s construction defects. Several days ago, on October 30, 2009, the First District Court of Appeal issued its ground breaking opinion in The Marseilles Condominium Owners Association, Inc., v. Travelers Casualty and Surety Company of America, 34 Fla. L. Weekly D2241b (Fla. 1st DCA 2009). The hiring of an attorney is an important decision that should not be based solely upon advertisements. Before you decide, ask us to send you free information about our qualifications and experience. Communications or information provided on this website should not be considered confidential and shall not be construed as creating an attorney-client relationship.