Q: What are the changes to homeowner association laws that were passed in the fall of 2008?
A: Kaye & Bender, P.L. provided a legislative update to its clients reporting the changes made in the fall of 2008. The firm’s report notes that the Legislative Session for 2008 produced a number of changes to the Statutes affecting homeowners associations. The following is a summary of these changes and an identification of the particular affected sections. This summary from Kaye & Bender is not intended to be an exhaustive explanation of the intricate detail of the changes nor is it to be considered complete legal advice on the subject. It is recommended that if there are any questions regarding any of these changes, you contact an attorney at Kaye & Bender for further discussion.
House Bill #1105 was passed this year, which made pertinent changes to Chapter 720 relating to the manner in which the homeowners would go about obtaining the appointment of a Receiver in the event there was no active board in place. Section 720.305(4) was deleted and replaced with Sections 720.3053 and 720.313. Under the first Section, prior to any action being taken, any member of the association is to give notice to the community of his or her intent to apply for the receivership and the Statute contains the specific notice that is to be sent. The notice is required to be sent to all owners by certified mail and be posted in the community at least 30 days prior to filing a petition seeking receivership. The association has the 30 day time period to fill the vacancies on the board. Thereafter, the court may make the appointment and the association is responsible to pay a salary to the receiver, as well as court costs and attorney’s fees. The second Section provides for the obligation of the Receiver to notify the individual members of the Association of his or her appointment. This notice is required to be sent within 10 days of the appointment.
House Bill #1986 has again materially altered the collection and foreclosure process. Section 720.3085 has had additional subsections included. Among the new provisions is an express relation-back of the lien of the association to the date on which the original declaration was recorded. However, this provision does not apply to first mortgages of record, having the lien be effective from the date of its recordation in the Public Records. The Statute adds specific provisions which must be contained in the lien for it to be considered valid. If the owner of the property that is the subject of the lien chooses, he or she may contest the lien by filing a Notice of Contest of Lien, in the form that is included in the Statute. If a Notice of Contest of Lien is filed, the association must foreclose on its lien within 90 days or the lien becomes void. The Statute now provides that an association may foreclose its lien and bring an action to recover a money judgment, and in both instances recover attorney’s fees and costs. It also provides that if the owner remains in possession after a foreclosure, the court can require the former owner to pay rent. If the property is rented when the foreclosure is pending, the association may attempt to collect the rents (with the appointment of a receiver). There is now an express provision that allows the association to purchase the parcel at its own sale.
The Statute also has been revised to clarify the mortgagee protection after a lender foreclosure. It indicates that the liability of a “first mortgagee”, or its successor or assign who acquires title to the parcel by foreclosure or by deed in lieu of foreclosure is to be the lesser of 12 months of unpaid common expenses and regular periodic or special assessments, or one percent of the original mortgage debt. This provision requires the lender to have named the association in its foreclosure.
The Statute was further revised to clarify its intent that the two (2) 45-day notices put into the Statute in 2007 are not intended to run concurrently, but rather that one follow the other, effectively providing for a 90-day notice period before the association may foreclose on its lien. An exception has been added, indicating that the time limits do not apply if the parcel is subject to a foreclosure action or forced sale of another party, or if an owner of the parcel is a debtor in a bankruptcy proceeding.
The procedures for a qualifying offer for the resolution of the collection matter have been revised to provide the association additional opportunities to void them. A form for making a qualifying offer was also incorporated into the Statute.
House Bill #601 provides for clarification on the authority for charging a fee for the preparation of estoppel certificates. Such authority to charge a fee for the estoppel certificate is to be contained in a written resolution or by a written management, bookkeeping or maintenance contract. The fee for the preparation is required to be set forth in the estoppel certificate as well. Under certain conditions, the fee may be required to be refunded and then assessed to the selling owner.