This in an anxious time in which to sit on the board of directors. With defaults and foreclosures accounting for some 20 percent or more of the units at some condominiums, frustration among association members is off the charts.
“It is really difficult to be a homeowner in the community paying your share,” observes attorney Kenneth Direktor of the West Palm Beach law office of Becker & Poliakoff, “when you’re also paying the share of the other guy who lives there, using all the amenities but hasn’t paid his assessment for two years. And the bank is taking its sweet time in foreclosing.”
With less income coming in, boards are often forced to raise monthly maintenance fees and levy special assessments. “It is a bad situation,” observes attorney Lisa A. Magill, a shareholder in the Fort Lauderdale office of Becker & Poliakoff. “Some people can’t afford to increase their maintenance and the statutes here allow communities associations to waive reserve funding.” It could lead to safety issues. Should the reserve run dry, if a major repair or renovation is required, says McGill, “you not only do not have the money to do the repairs—you may be jeopardizing other people in the building.”
In some states in the Northeast, notes attorney David Hartwell of Penland & Hartwell, LLC, a real estate law firm based in Chicago, “transparency has become a big issue. When everything’s good, nobody seems to care. But when things go bad, suddenly, they ask, ‘why aren’t you telling us what’s going on? Who’s running the joint?’”
But in Florida, which has some of the strongest condominium and homeowner protection laws in the country, “the crying out from association members,” observes Direktor, “is not necessarily an issue of transparency; it is an issue of frustration.”