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Condos, HOAs and Coops Will Have the Ability to Demand Rent

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SB 1196 Includes New Remedies for Collecting Money Owed to Associations.

Community leaders and managers have complained for years about investor owner delinquencies.  Why should the owner continue to collect rent from his or her tenant without paying maintenance fees and/or assessments?  Sure, both the Condominium and Homeowners Acts allowed the association to apply to the Court to request the appointment of a rent-receiver, but to take advantage of that provision it had to file the foreclosure lawsuit.  The law requires notices to the delinquent owner, preparation and recording of the claim of lien, filing and serving the foreclosure lawsuit – all before the association could ask the Judge for authorization to collect rent.  It could take several months to obtain the appropriate Court Order – all while the account remains delinquent. In some cases the tenant moves out before the association has the chance to collect any rent.  Of course there are costs and expenses involved with that whole process.

Recently (as reported on this blog in Condo Receiver Helps Collect AssessmentsQ&A: Condo Receivers; Collecting Rent from TenantsQ&A: Collecting Rent from Tenants (revisited) ) the Courts have extended the law to allow ‘blanket receiverships’ for all units subject to foreclosure – and even more recently some Orders were entered authorizing the receiver to collect rent from tenants occupying units even before the association filed for foreclosure.

Well, in response to those cries for help the legislature included a ‘self-help’ procedure for associations.  The first paragraph of this portion of the new law says:

If the unit is occupied by a tenant and the unit owner is delinquent in paying any monetary obligation due to the association, the association may make a written demand that the tenant pay the future monetary obligations related to the condominium unit to the association, and the tenant must make such payment. The demand is continuing in nature and, upon demand, the tenant must pay the monetary obligations to the association until the association releases the tenant or the tenant discontinues tenancy in the unit. The association must mail written notice to the unit owner of the association’s demand that the tenant make payments to the association. The association shall, upon request, provide the tenant with written receipts for payments made. A tenant who acts in good faith in response to a written demand from an association is immune from any claim from the unit owner.

The Association must follow a specific procedure to collect rent from tenants.  There are some pitfalls to avoid.  Its a good idea to discuss these issues with counsel or allow counsel to send the demands on your behalf.

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  • Steve Caballero
    June 18, 2010

    How soon will your firm be providing a legal update to clear up some of these ambiguities?
    RESPONSE: Becker & Poliakoff has already published an overview of some of the changes resulting from 2010 legislation in its May (Volume V) issue of Community Update. The Firm hosted a legislative webinar with guest Representative Bogdanoff and has several other webinars planned. The July (Volume VII) issue of Community Update is the Special Legislative Issue and will include more detail about the new laws.

  • florida girl
    June 18, 2010

    If an association demands that owners vacate the building for a renovation for four months and the owners have to pay rent to live elsewhere, is the association liable to reimburse that rent?

  • Bill Sanders
    June 23, 2010

    florida girl brings up a good question. I think a unit owner should be reimbursed for any expenses incurred when required to vacate their home.
    My question is: What if the tenant simply ignores the HOA demand to pay them rent? Just like the owner is doing. I really feel that there must be enforcement ability or these laws mean nothing. Voluntary compliance only works for some. Force must be applied for those who ignore the law.
    RESPONSE: The new law that allows the association to demand rent also allows the association to evict any renter that does not comply.
    In Florida Girl’s situation, isn’t everybody required to vacate? Well, if that’s the case, then everyone has to pay rent or make other arrangements for that 4 month period, right? (Parenthetically, 4 months sounds like a long time for the building to be completely inhabitable.) If that is the case then the board would have to assess everyone for the expenses – without delving into the legal issues – isn’t this a matter of 6 one or 1/2 dozen the other? Would you want to pay if one owner chose to live at the Ritz-Carlton while another owner rented a small 1 bedroom apartment?

  • dontneedtheheadache
    June 28, 2010

    if the condo assoc demands that the tenant pay them directly for the fees that the owner is not paying, is the lien dropped from the property? Can the owner do anything to the unit, such as lock out the tenant? Are they still the legal owner? What about the last month’s rent and security deposit the owner is holding from the tenant? What if the tenant does not have a lease?
    RESPONSE: The tenant’s relationship with the owner (landlord) doesn’t change. Thus, any claims involving advance rent or security deposits must be addressed with the owner, not the association.

  • benboy
    June 30, 2010

    Question # 1: You state eviction is possible if renter refuses to pay: what recou7rse if renter claims to be occupying rent free?
    Question #2: 720.3085 requires a renter to pay “any monetary obligation…” Must renter pay owner’s obligation(s) incurred AFTER 7/1/10, or incurred prior to? Does this mean payment to HOA of the rental fee AND maintenance assessment?
    #1 – If the association screens tenants a copy of the lease (may be an old lease) should be in the file.

  • Miami Condo
    July 6, 2010

    We are a small condo building with 1 unit in foreclosure. No maintenance or assessments have been paid since Feb 1, and there are long-term tenants living in the unit. They have not paid rent to anyone since March, but they claim that the owners hold 2 months deposit which would take them until May, so they’ve been living rent-free since May.
    We asked them (in writing) to pay us 2.5 months of full rent to catch up the unit with payments (in 3 separate months), then just the monthly maintenance after that (which is less than 1/4 of the rent) and they have refused. They “counter-offered” that they are willing to pay just the maintenance from July 1st on.
    We have informally polled the owners and every single one has stated that given the circumstances and how uncooperative the tenants are being, we would rather have the tenants evicted rather than receiving the maintenance every month, so we want to start eviction proceedings. While some income from that unit would be nice, we feel like the tenants are trying to take advantage of the situation since they aren’t paying rent to anyone.
    Do they have any legal standing trying to negotiate with us? The way we see it is we asked them to pay what we thought was fair, and in our view they are not complying so they must go.
    RESPONSE: Diverting rent pursuant to the new statute and evicting tenants requires an understanding of the court procedures, notices and laws involved. Board members have protection from liability if they act in accordance with the general standards for directors. In this case it is clear that the association needs the assistance of counsel.

  • Lynn Taylor
    July 6, 2010

    What rights does a tenat of along term leasehave if the owner owes 5,000 in fees to a hoa and the HOA is asing the tenat to send her rent checks to the HOA?
    THe condo has termites, she does not want herrent increased and does not want he ownersobligations to become her bad credit

  • David Hood
    July 7, 2010

    I own a condo in Miramar Beach, Florida that I purchased in Nov ’09 on a short-sale. The real estate agent sold the property as an investment income property that allowed short term rentals. the HOA covenants in fact allowed for this type of use.
    The current HOA manager is attempting to change the covenants by soliciting a 2/3 vote by the homeowners to disallow the short term rentals. Can he by law do this or am I grandfathered in under the original covenants?

  • Bill L
    July 16, 2010

    How has your law firm implemented the demand letter procedure outlined in 718.116 (11)? Also, do you know of any challenges to the new statute? Our counsel is telling us to wait, that there are too many problems/liabilities with the bill and potential complications with federal law. But we’re desperate to take advantage of this new tool.
    RESPONSE: Our Firm has started this process for several associations. I am not aware of any formal challenges (via lawsuits filed to invalidate the law).

  • Phyl
    July 17, 2010

    It seems unlikely that the tenant will go to the expense to challenge the statute but is the one who is caught in the middle. If he/she pays the full rental income to the HOA and the owner sues him/her, since the law is unclear until the court makes a decision concerning this issue, couldn’t the tenant be found liable to the owner for the portion of the rent that was for not for fees as well as for the rental income that was paid for obligations of the Owner that existed prior to July 1, as well as for Owner obligations that existed prior to her/his lease. Wouldn’t the Tenant also have to prove in court (if sued by the Owner) that he/she paid the rental income to the Owner in good faith. That could be quite a large expense for a tenant but how does he/she get around it except to vacate the unit?

  • Kwazi Yearwood
    August 5, 2010

    With Florida Statute 718.116 (11) how and what does the association need to present me with a request for me to my rent to them instead of the landlord. So for the accosiation has stuck a typed letter in my door. It does not have my name or the amount that is owed. I talked to my landlord and he said if i pay my rent to the association that he will start the eviction process. Also he said if I pay my rent to him that the company lawyers will represent me if any actions are brought against me by the association
    RESPONSE: Tenants did get “stuck in the middle” of the collection process. Its unfortunate. Section 718.116(11), Florida Statutes requires the Association to make a written demand to the tenant to divert rent payments. The Association also notifies the owner of the demand. The Statute specifically says “A tenant who acts in good faith in response to a written demand from an association is immune from any claim of the unit owner.” Please notify the association if the owner begins eviction – as the association may want to intervene.

  • Raven
    August 18, 2010

    I am confused within 5 days of telling me they will be collecting my rent mind you they had no court order just a letter typed at their office my condo association has filed to evict me. I have paid my rent and have a lease and now have to go to court for this. Will the judge just kick me out of my condo or order me to pay the condo association. I feel I am in the middle of someone elses fight and now have to suffer the consequences.
    RESPONSE: Yes, tenants are stuck in the middle when the landlord fails to pay assessments. The new statute authorizes the association to collect rent from the tenant. The tenant is entitled to a credit for any amounts paid to the association.

  • JoAnne
    August 25, 2010

    Under the new law Section 718.116(11) are the condo associations in Florida have right to collect condo fees from tenant if landlord has been delinquent in fees? Section 718.116 is not clear as it says “any monetary obligation” Are we only talking about rent payments?
    Thank you.

  • A
    November 6, 2010

    If a renter has to pay association fees, then he should also have the right to vote and have a voice in the affairs of the association.
    RESPONSE: Actually, that is not the case. The renter is not an owner and not a member of the association.

  • Kathy
    November 16, 2010

    I am a Board member of a condo community with several units in foreclosure. We are trying to foreclose ourselves on one unit who has not paid dues in two years but has a tenant living there. We cannot serve papers on the owner because he is on the move and we can’t locate him. Don’t we need to send a letter to the owner announcing our intent to collect rent from his tenant? How can we do that if we can’t find him? Also, is it legal to post a foreclosure notice somewhere if we don’t have an address for the owner? Help!
    RESPONSE: Your attorney should explain the service procedures. Yes, publication is an option with respect to the foreclosure action if you cannot locate the owner (after diligent search).

  • dc
    November 20, 2010

    We are condo owners – we have been in an illegal foreclosure battle since may 2008. Before it started we had paid our maintenance dues. When we tried to short sale the property we stopped paying the maintenance. We did not have a renter in the property, the maintenance was always paid when someone was in the unit. When the foreclosure started our attorney advised us not to pay the maintenance, incase we were to lose the lawsuit. After several months in early 2009 we wanted to try to rent the property to pay the hoa and to possibly help with legal fees but the hoa would not work with us and said we would have to pay all the back hoa fees in order to rent our unit, the hoa fees are almost 900.00 a month. We did not have it so we left the property empty. The situation drug on so about six months later we tried again. We told the hoa we would pay the current amounts due while the property was rented and that we would work the past out after this lawsuit was ended. They said no. In early 2010 we tried again, we thought we had an agreement with the association. We rented the unit on a short month to month lease. We took the payment to the office. They took the payment. After about three weeks they wrote us and said they would not accept the payment as we did not meet the agreement of paying the current month plus 1/2 a month of the past due. So, I did not pay them the next two months. Then this law was going into effect. At the end of June (before the law took effect) they started changing key codes and locking the tenents out of the front door of the building. Our tenants left because they felt like they were being treated very poorly. I went again to speak at the board meeting – they said they would only approve a rental if we paid 1 and 1/2 months dues. I have a renter now wanting the unit for 6 months. They will not approve the renter unless we put in the lease that the whole amount of the rent is paid to them and then they will release the other monies to us. They want us to sign a paper stating we will pay all monies due to them from the past and continue to pay the 1 1/2 months even if the unit is empty or they will not approve the renter.
    What are our options. I don’t care if the renter pays the hoa a month and 1/2 to them, but they should not be in total control of this. We did not cause this and we have tried on numberous occasions to work this out. We are not running from out debts, we are just trying to fight for our rights. I don’t understand why this association is acting in this way, we understand they need their money, we are trying to work in a very difficult situation. I do not want to put renters on a long term lease as I never know how things can work out. We had our Summary Judgment hearing in March 2010 and it was denied, we are going to trial and we still don’t have a date set. But all the letters they write to us are never about working together it is just demands and ultimatums.
    Can your firm help us?

  • T. Snow
    November 28, 2010

    Where does the bank who has given the loan to Mr. Condo owner fit into this picture? If the bank is foreclosing for non-payment and the tenant pays rent to the association, whats to stop the bank from evicting the tenant? The association doesn’t own the property, so what gives them the right to collect the rent. I can possibly see them going after the tenant for the association fees, but that is all they are entitled to. And the fees should be used to maintain the property- which in most cases it is not.
    RESPONSE: The tenant is entitled to a credit for any rental amounts paid to the association. A bank doesn’t usually seek to collect rent until it owns the property, but has the ability to apply for a court order to recover rent under most circumstances during a foreclosure action.

  • dc
    November 30, 2010

    I guess you only answer and help the HOAs and not individuals?
    RESPONSE: Our Law Firm has several attorneys throughout the state that also represent individual owners with respect to association matters or disputes. If you are looking for counsel, please contact the office nearest you and provide the information necessary for the Firm to check conflicts.

  • Dan P
    December 10, 2010

    We are renting a condo that has now gone into foreclosure. The landlord has agreed to let us stay for 3 months rent free until we find a new place (one of those months represents the security deposit that he can not refund because he does not have the money) We are also now a month to month tenant after our original lease expired. The Condo Association has now demanded payment, per FSS 718.116 however we do not have any monetary obligation to the landlord. Am I now obligated to pay a rent to the condo association that in essence is contrary to my agreement with the landlord?
    I have no idea how much money or months the owner is delinquent; however to the extent that there might be a substantial amount in arrears, can I just offer to pay the condo association the actual monthly amount, and not the arrears, and still be protected from eviction?
    Is it correct to state that the only defense in an eviction case of this nature is that the amount is not due?
    Finally, if I do have to pay the full rent to the association, how do I recover my deposit from an owner that has expressly indicated that he can not refund that money and therefore living it out is the only way to recover?
    It appears that this new amendment to the law seriously limits any right that a tenant might have and places the tenant as a pawn in their battle.

  • Chris F
    December 22, 2010

    Our condo HOA agreement requires us to be a member of a “Beach Club”. While the HOA dues include our Beach Club membership fees/dues, the Beach Club additionally charges “amenity fees” for the use of the pool, work-out room, shuffle-board etc. After several months in which several amenities were unusable/inoperable, I gave the Beach Club Manager notice that I was going to withold payment of these fees until the amenities were restored to working order. Several of the amenities are still out of order, but of course they still want their money.
    It doesn’t appear to me that the “Beach Club” is organized as an Association, so can Florida Statute 718.116 (11) be applied? I am operating under the basic premise that the Beach Club can’t charge additional monies for services they don’t provide. The situation is akin to a Gym charging fees for broken equipment that can’t be used.
    RESPONSE: Obviously the answer to this question requires an analysis of the legal and corporate structure. You can certainly ask to review official records if this is subject to Chapters 718, 719 or 720, Florida Statutes.

  • Tim Conelly
    February 16, 2011

    I am a tenant who got notified by the HOA that our landlord was delinquent in paying HOA fees. I started paying the rent directly to the HOA. At this point the account does not owe anything to the HOA. However, the HOA still wants full rent and not the monthly fee. Do they have the right to request full rent?
    Thank you for any help.
    RESPONSE: First, it is unusual for the association to reveal the amount of the delinquency on the account – in fact there may be exposure to liability as a result of disclosure of the debt. That being said, you are entitled to a credit in the full amount you pay to the association, so the status of the account is not really relevant to you as the tenant. I advise clients to change the demand to the tenant as soon as any delinquencies are satisfied – asking the tenant to pay rent in 2 checks, one payable to the association in the amount of the assessment and the remainder directly to the landlord. I see no reason why an association would want to take on the additional accounting responsibilities.

  • Doc
    March 11, 2011

    Can an HOA demand an addendum to lease agreements requiring tenants/lessors/lessees waive all future rights against the HOA regarding any aspect of 720.3085(8)? Our HOA is now “asking” owners who rent Condos execute an addendum to the lease agreement between Condo owner and renter that restates the statute then has the owner and tenant waive all future rights against the HOA.
    RESPONSE: It depends on the governing documents themselves. Many governing documents all the association to promulgate the use of a uniform lease or lease addendum.
    An addendum that merely recites the powers granted by the statutes does not operate as a release.
    Releases have to be pretty specific.

  • Tunde
    March 22, 2011

    I have a friend who owns a condo in Florida and has a tenant living there. My friend (the owner) has been having several complaints regarding the tenants causing noise nuisances constantly. The tenant is also late with the rent payment, although when they pay it’s being paid with late fees. The tenants are lying about paying the water bill because the owner received another bill just the other day regarding a $300 unpaid bill (several months of not paying it). The owner has complained to the condo association a few times (about the water bill not being paid, the rent being late, and the complaints from neighbors about the noise) but it seems like the condo association doesn’t do more than just send out an eviction letter to the tenant which is obviously being ignored because they are not moving. The condo owner really wants the tenant out but was told that the tenants cannot be contacted by him directly..the lease expires in a few months…..what can the owner do to kick the tenant out? What are his options?
    RESPONSE: The owner shouldn’t be complaining to the association – the association should be looking to the owner to resolve these issues. Every owner bears responsibility for the conduct of any occupants of their unit.
    The owner should hire counsel to determine whether eviction is possible now or whether it is better to wait until the lease expires. The association is not responsible for evicting tenants that owners find undesirable. If the association takes any action, it will be against both the owner and the tenant!

  • Shawn
    March 22, 2011

    I am a tenant that received a letter from an attorney acting as a collection agency for the community HOA that I am renting in. It demanded that I pay them my rent and when I told my landlord he told me to wait a month while he consulted his lawyers about it. My question is when a demand is made to a tenant does it have to be court ordered or can it just be a letter from a lawyer? I have no problem paying my rent to them but want to do so only if it is properly handled so I know that my landlord cannot come back and try to evict me.
    RESPONSE: A portion of the statute says:
    If the unit is occupied by a tenant and the unit owner is delinquent in paying any monetary obligation due to the association, the association may make a written demand that the tenant pay the future monetary obligations related to the condominium unit to the association, and the tenant must make such payment. The demand is continuing in nature and, upon demand, the tenant must pay the monetary obligations to the association until the association releases the tenant or the tenant discontinues tenancy in the unit. The association must mail written notice to the unit owner of the association’s demand that the tenant make payments to the association. The association shall, upon request, provide the tenant with written receipts for payments made. A tenant who acts in good faith in response to a written demand from an association is immune from any claim from the unit owner.
    The tenant is entitled to a receipt for the amounts paid to the association. Nonetheless, a landlord can file claims against the tenant – the claim would have to be defended in court.

  • Virjen
    March 23, 2011

    Hi I rent from an owner who owns a condo and I have a question about my renting rights. I moved in last year and had no issues with the association until now. Recently there charging my visitors to park and also installing boots to there cars is they pass a min on there visitor pass and charging them 65 dollars to remove the boot and 5 dollars for the pass. I am at my wits end they have the security guards installing the boots and removing the boots and we have to pay them if we dont they will tow the car away. Is there anything I can do? I feel as though I shouldn’t have to pay all the fees that there forcing the renters to pay everyday there putting new rules and more fees please help.
    RESPONSE: You should direct your questions to the owner of the unit. The owner can then address parking issues with management or the board of directors. The association may have updated its rules regarding visitor vehicles. As a tenant, you bear responsibility for compliance with association regulations.

  • Debi
    April 7, 2011

    The statute pertains to condominiums. By what authority do you claim it applies to cooperatives?
    RESPONSE: Section 719.106, Florida Statutes was amended in 2010 to include this remedy. Chapter 719, Florida Statutes governs cooperative associations.