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The Florida Consumer Collection Practices Act Prohibits Associations From Posting Delinquency Lists and Taking Other Actions to Collect Assessments and Maintenance Fees.

 There have been a number of newspaper articles explaining actions taken by community association boards and managers to collect delinquent assessments.  The Miami Herald reported that some associations post lists of the names of the owners behind on their fees and others deny security access devices to tenants of delinquent owners.  

The Wall Street Journal reported that some associations were taking control of the unoccupied units and renting them on a short term basis until the bank foreclosed.  

While we are all familiar with the idiom "drastic times call for drastic measures",  community leaders and property managers should understand that Florida law prohibits unfair or abusive tactics with regard to debt collection, including the collection of assessments.   Although the prohibitions in the Federal Fair Debt Collection Practices Act do not apply to the person or entity owed the debt (the 'creditor', which in this case is the Association), both community associations and their managing agents are responsible for compliance with the Florida Laws.

Among other practices, Section 559.72, Florida Statutes, prohibits the following:

• Use of profane, obscene, vulgar, or willfully abusive language in communicating with a debtor or any member of his or her family;
   
• Communication with a debtor under the guise of an attorney by using the stationary of an attorney or forms or instruments which only attorneys are authorized to prepare;
   
• Orally communicating with a debtor in such a manner as to give the false impression or appearance that such person is associated with an attorney;
   
• Publishing or posting, threatening to publish or post, or causing to be published or posted before the general public individual names or any list of names of debtors, commonly know as a deadbeat list, for the purpose of enforcing or attempting to enforce collection of consumer debts;
   
• Mailing any communication to a debtor in an envelope or postcard with words typed, written, or printed n the outside of the envelope or postcard calculated to embarrass the debtor. An example of this would be an envelope addressed to “Deadbeat, Jane Doe” or “Deadbeat, John Doe”;
   
• Communicating with the debtor between the hours of 9 p.m. and 8 a.m. without the prior written consent of the debtor.

While every association must be diligent with its collection efforts, those efforts must be in compliance with legal and ethical standards.

On the other hand, the Florida Courts are cognizant of the problem and have allowed Associations to have receivers appointed for the purposes of collecting rent from tenants when the owners of those units are facing foreclosure as a result of non-payment of assessments.  Remember to check this site in the future for more information about proactive methods to collect assessments.

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Yesterday Senator Fasano moved to amend SB 1012 to eliminate submerged land lease fees for single-family and multi-family residential docking facilities.  

If approved, not only would the existing exemption for single-family homes continue (and provide additional benefits to owners of larger single-family properties), but multi-family residential properties will not have to pay submerged land lease fees in the future.  Community Associations Institute ("CAI") a national non-profit organization dedicated to enhancing community association operations, primarily through outreach, education and advocacy efforts, led the charge against fee increases for community associations.

The amendment is scheduled to be considered on Thursday, April 16, 2009.

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Proposed SB 1012 would require rules to impose increased fees for submerged land leases.

SB 1012, filed by Senator Constantine along with the Committee on General Government Appropriations and the Committee on Environmental Preservation and Conservation seeks the imposition of new rules governing submerged sovereign land leases.  If passed by the legislature, the Board of Trustees of the Internal Improvement Trust Fund would adopt rules that, among other things:

• Create a "standard" lease term of at least 10 years;
• Create extended lease terms of up to 25 years under certain circumstances;
• Create fees for new leases, expansions of existing leases and modification of uses permitted pursuant to existing leases;
• Change existing rates for leases allowing for designated slip (where boat slips are assigned) use to $.30 per square foot, if the property is not located within an aquatic preserve;
• Change existing rates for leases allowing designated slip use (assigned slips) to $.60 per square foot if the property is located within an aquatic preserve;
• Provide for automatic adjustments of up to ten (10%) percent in fees paid to the State every five (5) years based upon the Consumer Price Index (CPI); and
• Provide for late fees.

Some community associations are justifiably concerned about the possible increased rates, especially considering the current economic climate.  The President of a condominium in Tierra Verde indicated fees payable to the State would increase by more than 400% for her community.

We encourage community leaders to evaluate the impact of passage of this bill upon their communities.  In this day and age of budget shortfalls, every increase in expenses impacts Association operations.  It is also important to determine whether fee increases may be passed on to dock users or must be absorbed as a common expense.

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