Florida law allows community associations to demand tenants of owners behind in maintenance payments to hand over rent payments — or face eviction. But does that mean your community association should jump into the rent collection business?
Craig Zeuner and fellow board members of his Boca Raton condominium community believe it's a good idea. They are trying to take advantage of the 8-month-old state law, but as of yet have not collected a dime in overdue fees.
"The theory behind the law is very sound; I think it's great," said Zeuner, president of the Casa Nueva condo association. "We have been attempting to collect rent payments from tenants. So far we haven't been successful. We haven't seen results. But the law is still new."
The board of directors of Casa Nueva, which oversees a community of 121 condo units, have sent out demand letters to three owners and their tenants in the past four months. The letters notify everyone that tenants could be kicked out if they do not re-route rent payments to the association instead of — and until the owners are current with association fees. "Nobody has responded yet. We don't know if they are ignoring us or what," he said. "Last night the board decided to go forward with the evictions."
The law gives renters 14 days to respond to a demand letter that must be sent via certified mail. After that, the association may move to post an eviction notice on the front door for a period of at least three days. If there is still no response, the association may file for an eviction action in county court.
Renters have some protection under the law. They are legally off the hook for owing the rent paid to the association in lieu of the landlord, which means the landlords may not seek to collect double rent. And if the tenant paid the owner shortly before receiving a demand letter, they can provide evidence of that payment within 14 days and will not have to begin handing over rent checks to the association until the following month.
Still, at least two legislative bills seek to give associations even more rent-collecting powers, further tilting things in favor of the associations.
One bill — filed by the association lobbying group Community Association Network — empowers associations to collect full instead of partial payments from tenants of delinquent owners, and to do so until the owner is current with past dues.
Another bill filed by Sen. Mike Fasano, R-New Port Richey, allows associations to file liens against properties to recoup fees owed to property management companies or property managers for services related to attempting to collect late payments from owners. Fasano's bill "will clarify the rights and responsibilities of the management company providing these services and allow the association to ensure that the additional expense is passed on to the delinquent owner," Yeline Goin said in an e-mailed statement. She is co-executive director of the Community Association Leadership Lobby, which supports Fasano's bill.
But rent collections could become a thorny venture, and financial success for a community may depend on many factors, including who collects and how.
"Some associations will be more skilled at collecting rent than others," said Donna Berger, of the community association law firm Katzman, Garfinkel and Berger and a guest blogger for the Sun Sentinel. "I have seen demand letters that were certainly not drafted with the tenant's sensibilities in mind. Starting letters with threats, ambiguities as to who owes what and a general disregard for the tug-of-war between tenant and landlords will not help an association achieve what it wants."
The cost of collecting brings up more questions. How much should an association or vendor charge to collect late payments? How much to send out a demand letter? How much to knock on a door or make a phone call?
"I have seen property collection fees of up to $200 for a single $150 assessment, and that was before the account was sent to an attorney. If the statute is changed to make that legal, then who knows what they will charge?" asked Jean Winters, an attorney in Boca Raton who specializes in representing individual owners of community associations. She also is a guest blogger for the SunSentinel.com Condos & HOAs page.
"Until recently, property managers did not typically charge homeowners for collections," Winters said. "If this bill passes, then property managers should be subject to regulation like the Fair Debt Collections Practices Act."
What do you say? Do such laws make sense? Are you in a related situation as a tenant, landlord or board member? If so, send an e-mail to dvasquez@sunsentinel.com for possible inclusion in this column.
dvasquez@tribune.com or 954-356-4219 or 561-243-6686. Daniel Vasquez' condo column runs Wednesdays in Your Money and at SunSentinel.com/condos. Check out Daniel's Condos & HOAs blog for news, information and tips related to life in community associations at SunSentinel.com/condoblog. You can also read his consumer column Mondays in Your Money and at sunsentinel.com/vasquez.
Should community associations get into rent collections?
New existing and proposed laws make it easier for associations to siphon rent payments from deadbeat owners
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