I read two articles in last Sunday’s edition of the Sarasota Herald-Tribune that should be of great interest to resident owned communities.
The first article focuses on the "false sense of security" that many Florida residents may have when the next hurricane approaches because they purchased "home protection products" even though the claims that these products make homes "hurricane resistant" or even "hurricane proof" may never have been tested or may in fact were found to be false. It’s a lengthy report but well worth reading if for no other reason than to remind managers and ROC board members of the dangers involved in recommending products or service providers. Remember, we live in a world where potential liability lurks just around the corner. No ROC wants to be sued because it recommended a product or service to one of its residents and that resident was injured or suffered damage to his property because the product or service recommended by the ROC board member or manager didn’t perform as advertised.
The second article concerns the foreclosure crisis and reports that many lenders have now decided to delay taking title to properties that are in the process of being foreclosed. There are a number of reasons for this, including those I’ve listed below:
- Lenders are now being required by judges to produce more records and file more pleadings and this adds to the time involved in the legal proceedings
- Lenders already have much more foreclosed real estate in their portfolios than they can sell at this time
- Every lender knows that once that lender takes title to a property at the foreclosure sale, that lender becomes responsible for both assessments and fees for the parcel and the maintenance and upkeep of the property
- Lenders have no desire to pay any amounts for properties that are "non-performing" (that is, properties that are generating no income for the lender) and thus many of them have decided to leave these "non-performing" properties in "foreclosure limbo" rather than taking title to them.
This article simply confirms conversations I’ve had with representatives of several lenders within the past few weeks.
What this means for ROC’s is quite simply that whatever rights ROC’s have to collect unpaid assessments under Florida Statutes Sections 718.116(1)(b) (for condominiums), 719.108(1) (for cooperatives) or 720.3085(2)(c) (for mandatory homeowners associations), those rights are triggered by the acquisition of title to the property–and if the lender chooses to delay the foreclosure proceedings, that "trigger date" will occur later (in some cases, much later) rather than sooner. During this "limbo" period, ROC’s will be forced to deal with properties that may not be properly maintained and are not providing any income to the community’s coffers. This is already creating substantial hardship for many communities thoughout the country.
I certainly cannot tell you that relief is just around the corner from the many problems being created by the foreclosure crisis and the epidemic of untested, unproven, or defective "hurricane protection products" but I’ll do my best to keep you posted when I read about any further developments.