Legislative Update! Sort of.

You know that when the Florida legislature is in session, you need to look out for falling debris. This year would be no exception.

The big condominium issue of the year is foreclosure relief for associations, most of whom are suffering when the banks foreclose, and the association loses out. Under 718.116 as currently written, if the bank ends up with the apartment (which, these days, is almost always the case), the bank only owes 6 months maintenance going backwards (or 1% of the loan amount whichever is less). Thus, the bank actually has an incentive to take its sweet time in completing the foreclosure; while it's dragging on, every day that goes by is a loss of revenue for the Association. Not good.

This year's winning formula (and it's a good one!) is contained in Committee Substitute for House Bill 1397, Representative Robaina's (and others) annual effort to legislatively clean up various condo issues. This currently 190 page monster has been assigned to four committees, and only one of them has acted on it, passing it out of committee on April 1. It still has to through three more committees, and the Senate has to agree on the same thing, in order for it to go to the Governor, who may or may not sign it. And the legislative session is already half over! In other words, it's not time yet to break out the champagne, but it is worth looking at.

The bill deals with literally dozens of different issues. This post will focus only on foreclosure relief. I'll wait to see if the bill has any life in it before delving further into it, and explaining more of it in this space.

Here's how the law would work, if passed as currently written; first off, when the Bank files the foreclosure, within 15 days of filing, they have to pay all of the outstanding maintenance, and maybe (I'll check on this and get back to you) outstanding special assessments, too. In any event, they now have a disincentive to waiting to start the foreclosure. If the bank doesn't pay within 15 days, then the Association can have the case dismissed, and be awarded its attorney's fees too! That's teeth, and I like it.

Once the foreclosure is finished, and if the Bank is the buyer at the end, then the Bank would owe 1/2 of all assessments (again, maybe including special assessments) that accrued during the foreclosure case (or 1% of the loan whichever is less; I'd like it to be just the 1/2, but you can't have everything). Thus, the Bank now has a disincentive from delaying the case, too, since every month that goes by, the Bank will owe more.

I'll keep an eye on the bill and report back from time to time. Enjoy.

P.S. Thanks to City of Miami Beach Commissioner Jerry Libbin, who has worked very hard on getting this foreclosure relief for the Assocations. He's done a terrific job at it.