Proposed Bill: Speedy Foreclosures for Unpaid HOA Dues

Proposed Bill: Speedy Foreclosures for Unpaid HOA Dues



 

Proposed Florida legislation would speed up community associations’ ability to foreclose on houses or condo units with unpaid dues in the Sunshine State. Homeowners behind on their community-association dues would have to make good on the full amount before fighting the charges, under a bill filed by Sen. Alan Hays (R-Umatilla). The bill would also bring state oversight to Florida’s homeowner associations.

If passed, the legislation would allow an association to foreclose immediately on the house if a homeowner didn’t deposit the unpaid balance in a special registry as directed by a court; now, owners can contest associations’ charges in a process that can stretch out for years.

Supporters of the bill have said that the proposal is a way to shore up the finances of homeowner associations, many of which were affected by the recession. During the economic downturn, many investors and owners failed to pay their HOA dues. In response to the drop in revenue, community associations cut back on spending and are now more likely to foreclose on properties in hopes of forcing payment. Supporters see this as an opportunity to relieve the burden from a community’s dues-paying owners who have had to shoulder more of the association’s operating costs in place of the delinquent owners.

The pay-up-now proposal is just one provision of a bill that also would make the state Department of Business and Professional Regulation responsible for Florida’s homeowner associations, which are currently loosely regulated even though an estimated 60,000 subdivisions, neighborhoods, and developments across the state are governed by associations. The bill is a starting point for discussion and subject to amendments, said Hays, but he wants to level the playing field in the way associations are governed. “My purpose in sponsoring the bill is to try to establish more fairness in the homeowner-association community and try to have a better balance between the residents and the developers,” Hays said in a statement.

The bill calls for homeowners in an association to pay $4 annually to cover the costs of state regulation and oversight, including a government ombudsman for associations. Associations would also have to hold secret-ballot elections for board members; rules for elections are currently much more lax. 

Critics of the proposal are skeptical about some of the provisions, asking whether it’s fair to force delinquent homeowners to immediately pay all of their back dues before allowing them to challenge whether they actually owe that money, since one reason for withholding dues is because the owner is contesting whether charges are legitimate.

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