Posted By Larry Tolchinsky on May 21, 2013

South Florida Condo Ownership is Different Than Owning a Single Family Home

For those looking into buying a Florida condo, as well as those who own a condominium either as their home or as an investment property, one of the key considerations in this type of real estate ownership is the reality of dealing with an association or board.  Buying, owning, or renting out a single family home often means you make certain decisions yourself: can or will there be a hot tub?; what color will your front door be?;  what kind of pets can your kids have in the house?

Owning a single family home (which is not part of a homeowner’s association) also means that you have the responsibility for all the upkeep and maintenance.  Yearly checks of the air conditioning system?  Your job.  Making sure that there’s not a leak in the wall behind the dishwasher?  Your job.  And if repair is needed, it’s up to you to get that done – and to file a claim with your homeowner’s insurance coverage as needed.

Condo ownership is different, and for many, the difference of sharing common areas and sharing responsibility for things that a single family home owner shoulders all alone is one of the big benefits of owning a Florida condo.  It can be especially nice if you own a condo as a second home or as an investment and not be nearby to check on things – knowing that there is a Board of Association watching over the property can be comforting.

Many see this as being smart, and so they buy a condominium in South Florida because they know they can leave a lot of these chores to the local “authorities.”

Condo Boards, Community Associations:  Powerful Entities Given Rights Under Florida Statutes

As we have posted about earlier, these kinds of properties have specific laws and regulations that govern them.  Boards and Associations can wield lots of power in their arena; when some go bad, owners can feel like they are living in a fiefdom where the Board acts as ruler, issuing edicts and forcing compliance at its whim.  Many, many controversies arise every day between individual owners and governing bodies over owner’s desires to do or not to do some act.

Rogue condo boards and community associations defend themselves against claims of individual owners everyday.  These kinds of cases are so commonplace that alternative dispute resolution has been implemented.  The Florida Legislature has passed special laws to deal with the situation, explaining:

(3) LEGISLATIVE FINDINGS.—

(a) The Legislature finds that unit owners are frequently at a disadvantage when litigating against an association. Specifically, a condominium association, with its statutory assessment authority, is often more able to bear the costs and expenses of litigation than the unit owner who must rely on his or her own financial resources to satisfy the costs of litigation against the association.

(b) The Legislature finds that alternative dispute resolution has been making progress in reducing court dockets and trials and in offering a more efficient, cost-effective option to court litigation. However, the Legislature also finds that alternative dispute resolution should not be used as a mechanism to encourage the filing of frivolous or nuisance suits.

(c) There exists a need to develop a flexible means of alternative dispute resolution that directs disputes to the most efficient means of resolution.

(d) The high cost and significant delay of circuit court litigation faced by unit owners in the state can be alleviated by requiring nonbinding arbitration and mediation in appropriate cases, thereby reducing delay and attorney’s fees while preserving the right of either party to have its case heard by a jury, if applicable, in a court of law.

What does that mean?  An individual owner is unable to immediately file a lawsuit in civil court over his or her challenge to the Board or Association, no matter how meritorious, because certain complaints must be heard before a Mediator or Third Party Arbitrator.

See Florida Statute §718.1255 which discusses alternative dispute resolution, voluntary mediation and mandatory nonbinding arbitration between a condo owner and the board of directors.

Not All Disputes Are Routed to the Conference Table in Mediation or Arbitration: Instances Where An Owner Can Sue

There are key exceptions to the Florida laws that push unhappy condo owners to mediation and arbitration, and one of them involves defining the type of dispute that is involved.  There are certain controversies that are considered so serious that they go directly to a civil lawsuit where a judge will preside over them.

Disputes are defined here by Florida Statute §718.1255(1), which provides that:

“Dispute” does not include any disagreement that primarily involves: title to any unit or common element; the interpretation or enforcement of any warranty; the levy of a fee or assessment, or the collection of an assessment levied against a party; the eviction or other removal of a tenant from a unit; alleged breaches of fiduciary duty by one or more directors; or claims for damages to a unit based upon the alleged failure of the association to maintain the common elements or condominium property.

Bottom line?  Condo owners with the following complaints can file their lawsuit without concern about a preliminary mediation or arbitration:

• real estate title issues to the unit
• real estate title issues to a common element
• issues over a warranty’s coverage (interpretation of the warranty’s language)
• issues over whether or not a warranty covers something
• conflicts over fees or assessments levied or collected against someone
• eviction or removal of a tenant
• breaches of fiduciary duties of the Board or Association Directors
• claims against the Association or Board for failing to do their duty regarding care and maintance of common areas.

Larry Tolchinsky’s Tip:  When you have a title issue, a damage claim because of common area mishaps like a shared air conditioning system causes damage, a pipe servicing several units bursts and causes water damage in your unit, or a sewage line breaks, and the ruling authorities don’t promptly address your needs, then that’s when you can simply file a lawsuit and ask the Court for help.

Own a Florida condo?  Follow our posts under the topic “Condos and Townhomes” here on AboutFloridaLaw.com.

Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com, or (954) 458-8655. If you have a specific or personal situation, please call or email Larry because he can’t answer specific fact questions in general comments.

“I’m happy to take your call.”

No Comments
Tags: arbitration, Condo Law, Condominium Lawyer, Florida Condo Law, Florida Condominium, Quiet Title

Posted By Larry Tolchinsky on May 16, 2013

No Comments
Tags: Broward County Probate, Broward Real Estate, Florida Homestead, Florida Law, Florida Real Estate, Florida Trusts, strategic default

Posted By Larry Tolchinsky on May 14, 2013

Florida condominiums are used in several ways, as year-round homes, as vacation homes, and as investment properties. Many Florida condo owners permanently live in other parts of the country as well as around the world.

In fact, our local area is well-known with foreign buyers: the National Association of Realtors’ Profile of International Home Buyers has confirmed that last year, over 31% of all international real estate sales in Florida happened here, in the Miami area and its surrounding communities.  Over half of these foreign buyers in our area (coming from Canada, Venezuela, Britian, and more) are buying South Florida condominiums.

Condos are home to lots of folks and they are hot properties today.  According to the Miami Association of Realtors, the median sales price for a Miami-Dade condo was up 24.6% from last year (comparing first quarters) and already in May 2013, the sales prices for these condo properties has rise 4.5% over the first quarter of 2013.

Which brings us to the issue of upkeep and maintenance of these properties, particularly water damage.  Whether an owner, a tenant, or a property manager is responsible for monitoring the condition of a Florida condo, one of the biggest concerns from a real estate ownership perspective is avoiding water damage and the expense of property repair due to water damage losses.  This is true not only for condos that are being considered for sale, rent or purchase, but for Florida condos that are permanent and long term homes for their owners.

Types of Water Damage Common in South Florida Condos

Condominiums are known to have particular kinds of water damage issues as a general rule, many of which can impact not just the single unit but neighboring condominiums and the common areas as well.  These include:

• washing machines that leak onto floors that do not have drains in the floor to protect against excess water coming from the washer;
• burst water pipes (those who don’t live in South Florida in the winter may not realize that we can reach freezing temperatures here that can impact plumbing);
• leaky toilets (like a busted fill valve);
• water heaters that leak (again, this is a real concern when floors do not have drains);
• dishwashers that leak (hoses fail, for example);
• refrigerators leaking (usually these aren’t discovered quickly since the kitchen design may hide the sides and back of the fridge); and
• bathtub and showers (old caulk that lets water through, shower pans that fail).

Fighting Insurance Companies Who Fail to Pay Water Damage Claims or Not Paying Enough on a Condo Water Damage Claim

Property insurance policies exist to help condo owners in situations where water damage has harmed their property.  Most people assume that they pay their insurance premiums and if they need to file a claim on their property insurance policy, things should be simple — as simple as it is for the insurance company to take that premium payment every month.

Unfortunately, this is not the case in many instances of South Florida condo owners filing claims for damage, particularly water damage, to their real estate.  It’s true that you can usually call in your claim, that’s easy enough.  However, the folk on the other end of the line aren’t your pals here:  they are representatives of a big company that answers to shareholders and is very interested in its bottom line.

Claims mean money paid out that lessens profit to the insurance company.  Insurance companies work not to help the individual policyholder but to keep the company profitable.  That’s the reality of things, which means that condo owners need to be well prepared to deal with the event of a insurance claim needing to be filed.

Condo owners need to do things like:

• make sure that the policy information that has been reported to the carrier is accurate (if it’s not all accurate, then it may form the basis of a denial);
• make sure that they have kept up with their property so the carrier cannot blame them for the loss;
• be aware of Florida laws, including the availability of public adjusters, who are third party professionals that can come in to evaluate the situation as an independent third eye (instead of relying on the company’s employee to be the adjuster on the claim); and
• be aware of the claims process — how long they have to file a claim, and when claims need to be filed as soon as possible after the damage has occurred.

If insurance claims aren’t properly respected, either because they pay too little or because they are denied outright, then filing a lawsuit against the insurance company may be the best alternative for the condo owner.  Litigation may be necessary in these South Florida situations, especially in instances where weather has resulted in a lot of claims being filed in a short time period.

Condo owners need to be aware of their rights and responsibilities regarding property damage and property insurance claims.  And those considering buying a South Florida condo, or those Miami area condo owners who live in other states or foreign countries, need to know their rights and prepare in advance to avoid a condo insurance claim fight.

Special Note For Our Frequent Readers:  Realty Trac’s latest Foreclosure Market Report has been released for May 2013, and according to their experts, there’s good news and bad news. Good news? Florida new (starting) foreclosures fell 27% from March 2013 to April 2013.

Not so good:  April 2013 and March 2013 both saw Florida with the 2nd highest foreclosure rate in the United States.  Also, foreclosure auctions in Florida (NFS) were up 55% from April 2012 and that means April 2013 is the 4th month in a row with an annual increase in foreclosure auctions scheduled to happen in Florida.

There’s more:  check out the report summary at RealtyTrac.

Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com, or (954) 458-8655. If you have a specific or personal situation, please call or email Larry because he can’t answer specific fact questions in general comments.

“I’m happy to take your call.”

Related:
Florida Condominium Law and the Broken Water Heater

No Comments
Tags: condo damage, Condo Law, Condominium Lawyer, Florida Condo Law, Florida Condominium, insurance claims, Property Insurance

Posted By Larry Tolchinsky on May 9, 2013

No Comments
Tags: Florida Real Estate Foreclosures, Foreclosure defense attorney, foreclosure defenses, House foreclosure, Mortgage foreclosure, Property foreclosure

Posted By Larry Tolchinsky on May 7, 2013

The proposed “foreclosure reform” legislation that failed last year, got revamped, and was proposed again this year to be made into new Florida law has been a big concern for foreclosure defense attorneys and advocates for Florida home owners.

We’ve been monitoring House Bill 87 as it has been making its way through the Florida Legislature (read our prior posts here) and now, sadly, the House of Representatives has approved HB 87 and it is now setting on Governor Rick Scott’s desk, awaiting his signature to become the law of this state.

| Read the final text of HB 87 here. |

This New Foreclosure Reform Law Creates Lots of Problems for Lots of People

As we have been pointing out — along with lots of other people including Florida Senator Darren Soto and the group Jurists Engaged in Title Integrity  – this new legislation doesn’t help as much as it hurts lots of people, in lots of ways.  If Governor Scott does not veto this bill, it will become the law of the State of Florida and it will then be up to Florida home owners courageous enough to take this fight to the appellate courts to try and return justice to the Florida Home Owner.

What injustice is here?  There are many bad things in HB87 from a Florida home owner’s viewpoint, here are some things to consider:

1.  Florida Land Titles Are In a Mess 

For instance, there’s the question of land titles.  With this new law, future buyers of Florida real estate are going to have a big problem on their hands because Florida real estate titles are simply a huge mess.

Insiders know this:  testimony given before the Florida House Subcommittee considering the passage of this very bill by none other than a representative of the Florida Title Insurance Industry explained to the lawmakers that there has been so much fraud in Florida foreclosures that title insurance companies cannot figure out what land title files have fraud tainting them and which are clean.  From his testimony:

“You should not buy a foreclosed property, knowing how much fraud was out there. … We cannot determine what files are infected with fraud, I wish we could, but we cannot, so you should not purchase foreclosed property.”

Banks know that real estate titles in the State of Florida are not trustworthy these days if the property has been touched in any way by a foreclosure.  And that’s a lot of property records, isn’t it, given the record breaking number of foreclosures this state has experienced over the past few years?

By passing HB87, the Florida Legislature has done nothing to help clear up the Florida Title Mess and in fact, has contributed to this problem.  Helping banks to foreclose means that banks and mortgage lenders wrongfully foreclosing on homes get to do so faster.   Then, the future homeowner who purchases that real estate gets an incomplete title to property and a big headache down the road.

2.   HB87 Blocks Victims From Getting Their Homes Back After Wrongful Foreclosures

Another big problem with the passage of HB87:  the home owner who has been wrongfully foreclosed upon — who has lost their family home to a bank who has improperly foreclosed upon that family — cannot get their home back.  The new law has included within it a “finality of foreclosure” provision.

HB 87′s language includes a section that protects banks by stating that if a lender forecloses on a Florida home, and later it’s shown by foreclosure defense arguments in court that the foreclosure was done illegally (fraud, mistake, etc.), then the bank is protected by the new “finality of foreclosure” law which means that the homeowner’s remedies do not include getting that home back.

Here is the provision as it appears in the final version of HB87, the language blocking a borrower the right to get his home back is in bold:

702.036 Finality of mortgage foreclosure judgment.—

162 (1)(a) In any action or proceeding in which a party seeks to set aside, invalidate, or challenge the validity of a final judgment of foreclosure of a mortgage or to establish or reestablish a lien or encumbrance on the property in abrogation of the final judgment of foreclosure of a mortgage, the court shall treat such request solely as a claim for monetary damages and may not grant relief that adversely affects the quality or character of the title to the property, if: [ conditions omitted] …. 

(b) This subsection does not limit the right to pursue any other relief to which a person may be entitled, including, but not limited to, compensatory damages, punitive damages, statutory damages, consequential damages, injunctive relief, or fees and costs, which does not adversely affect the ownership of the title to the property as vested in the unaffiliated purchaser for value.

Once the bank forecloses, wrongfully or not, that home owner cannot get the family home back even if the evidence shows that the bank has foreclosed wrongfully on that property.  Did the bank mix up which condo to foreclose upon?  Too bad, the wronged condo owner doesn’t get their condo back.  Did the bank never own the mortgage, and therefore had no legal right to file a foreclosure lawsuit?  Too bad: the home owner cannot get their home back.

Right now, it’s not clear if Governor Rick Scott will sign this bill into law.  If he does, then the Florida courts will be where justice is found — until then, this bad legislation will be the law of the land here in Florida and lots of Floridians are going to be hurt by this thing.

Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com, or (954) 458-8655. If you have a specific or personal situation, please call or email Larry because he can’t answer specific fact questions in general comments.

“I’m happy to take your call.”

No Comments
Tags: Broward Real Estate, Florida Law, Florida Real Estate, Florida Real Estate Foreclosures, Foreclosure Fraud, Foreclosure Help, House foreclosure, Mortgage foreclosure, Property foreclosure