Pickin' Picnic Memorial Day Weekend

Realize Bradenton will rock Bradenton's Riverwalk Memorial Day weekend with the fourth Pickin' Picnic 2015 showcasing the region’s music scene. C&S is an event sponsor.  
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3:00pm – 4:00pm Chasing Jonah
4:15pm – 5:15pm Hymn For Her
5:30pm – 6:30pm The Dram
6:45pm – 8:15pm Lions After Dark
8:30pm – 10:00pm Have Gun, Will Travel
 

 

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Senate Passes Bad Bill - Needs Major Surgery

Roger Kesselbach: Bad bill for homeowners needs major surgery

 

Florida’s homeowners and neighborhoods need a doctor.  We need someone who can perform surgery on a very bad bill, a bill that sticks homeowners in the heart with what amounts to a legislatively mandated dues increase.  I want to be crystal clear about this: CS/CS/CS/SB 736 aka, the “estoppel bill,” will force homeowners’ dues to go up.  Here’s how:

 

The Florida Senate passed a bill that requires condominium and homeowners’ associations to cap the cost of preparing a legal document known as an estoppel certificate. Sometimes these documents take many hours, accountants and lawyers to prepare in order to make sure they are accurate. When that happens, the cost goes up. It’s that simple. That’s how the free-market works.

 

These certificates are not easy to prepare. We must verify the absolute correct address of the property, resolve any inconsistencies in it, make sure the owner’s information is also perfectly accurate (oftentimes either through a marriage, divorce, or other significant life events, someone’s name can and will change), and then the collection status must be verified and supported via documentation. This part of preparation alone can be especially complex when the homeowner has a large number of outstanding charges, many of which are often disputed. Further, assessment levels can differ from home to home and condominium and homeowners association boards of directors, who are generally volunteer community residents untrained in such matters, often must have professional help in verifying the pay-off figures and ensure the certificates are correctly completed.  In short, even a so-called, “simple” estoppel certificate can take many hours to accurately prepare.

 

And this must be stressed; these things HAVE to be accurate because when a homeowner fails to pay thousands in past dues or fees and sells their home, the neighbors end up stuck with the bill if they are not.  But the Senate has said that not only will homeowners no longer be guaranteed payment, the actual price we can charge will be capped at an absurdly low amount. This price-fixing move will force neighbors to pay the extra cost of preparing these documents.

 

The Senate has decided that the best role of government is to interfere in a private transaction and set an artificial limit on what one party may charge another. It’s not just morally reprehensible; it is flat out unfair to homeowners who will now be forced to pay the extra cost.

 

The bill is now headed to the Florida House – the last place it can be fixed. The Florida House is the last hope for homeowners and neighborhoods. The Florida House is the last stop for true conservatives to step up and say, “We believe in less government, not a government that believes in price-fixing and government-imposed caps.”  And I ask because this session, the voices of homeowners are not being heard. We – actual real live homeowners are going to pay the price for this bad legislation. 

 

This bill will put an unnecessary burden on Florida home and condominium owners and on the association volunteers who donate their time to manage the not-for-profit community associations for the residents. It is the homeowners who will be footing the bills for the balance of the cost of estoppel certificate because of the arbitrary and artificial caps this bill impose, costs that delinquent owners should be paying, not their neighbors.

 

It is these small not-for-profit association volunteer boards who will be stuck trying to jump through legal hoops knowing that their communities may no longer be able to afford the costs caused by delinquent owners. It is they who will be stuck tracking real estate transactions that the association they manage should NOT be involved in in the first place.

 

And the Florida House – where this bill now resides – is the last stop where this bill can be thrown on the table, put under the knife and surgically repaired.

 

So I ask, “Is there a doctor in the House?”

 

Roger Kesselbach is president of the Space Communities Association, a non-profit all volunteer organization representing nearly 20,000 residential units and their owners in Brevard County. He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..   Column courtesy of Context Florida. 

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Senate Bill Passes - Needs Major Surgery

 

 

Roger Kesselbach: Bad bill for homeowners needs major surgery

Florida’s homeowners and neighborhoods need a doctor.

We need someone who can perform surgery on a very bad bill, a bill that sticks homeowners in the heart with what amounts to a legislatively mandated dues increase.

I want to be crystal clear about this: CS/CS/CS/SB 736 aka, the “estoppel bill,” will force homeowners’ dues to go up.

Here’s how:

The Florida Senate passed a bill that requires condominium and homeowners’ associations to cap the cost of preparing a legal document known as an estoppel certificate. Sometimes these documents take many hours, accountants and lawyers to prepare in order to make sure they are accurate. When that happens, the cost goes up. It’s that simple. That’s how the free-market works.

These certificates are not easy to prepare. We must verify the absolute correct address of the property, resolve any inconsistencies in it, make sure the owner’s information is also perfectly accurate (oftentimes either through a marriage, divorce, or other significant life events, someone’s name can and will change), and then the collection status must be verified and supported via documentation. This part of preparation alone can be especially complex when the homeowner has a large number of outstanding charges, many of which are often disputed. Further, assessment levels can differ from home to home and condominium and homeowners association boards of directors, who are generally volunteer community residents untrained in such matters, often must have professional help in verifying the pay-off figures and ensure the certificates are correctly completed.

In short, even a so-called, “simple” estoppel certificate can take many hours to accurately prepare.

And this must be stressed; these things HAVE to be accurate because when a homeowner fails to pay thousands in past dues or fees and sells their home, the neighbors end up stuck with the bill if they are not.

But the Senate has said that not only will homeowners no longer be guaranteed payment, the actual price we can charge will be capped at an absurdly low amount. This price-fixing move will force neighbors to pay the extra cost of preparing these documents.

The Senate has decided that the best role of government is to interfere in a private transaction and set an artificial limit on what one party may charge another. It’s not just morally reprehensible; it is flat out unfair to homeowners who will now be forced to pay the extra cost.

The bill is now headed to the Florida House – the last place it can be fixed. The Florida House is the last hope for homeowners and neighborhoods. The Florida House is the last stop for true conservatives to step up and say, “We believe in less government, not a government that believes in price-fixing and government-imposed caps.”

And I ask because this session, the voices of homeowners are not being heard. We – actual real live homeowners are going to pay the price for this bad legislation.

This bill will put an unnecessary burden on Florida home and condominium owners and on the association volunteers who donate their time to manage the not-for-profit community associations for the residents. It is the homeowners who will be footing the bills for the balance of the cost of estoppel certificate because of the arbitrary and artificial caps this bill impose, costs that delinquent owners should be paying, not their neighbors.

It is these small not-for-profit association volunteer boards who will be stuck trying to jump through legal hoops knowing that their communities may no longer be able to afford the costs caused by delinquent owners. It is they who will be stuck tracking real estate transactions that the association they manage should NOT be involved in in the first place.

And the Florida House – where this bill now resides – is the last stop where this bill can be thrown on the table, put under the knife and surgically repaired.

So I ask, “Is there a doctor in the House?”

Roger Kesselbach is president of the Space Communities Association, a non-profit all volunteer organization representing nearly 20,000 residential units and their owners in Brevard County. He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.Column courtesy of Context Florida. 

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C&S 2015 Paw Partner with Humane Society

C&S is very proud to again be a Paw Partner with the Humane Society of Manatee County for 2015.  The Humane Society of Manatee County is a community-based private non-profit organization that relies entirely upon donations to do their lifesaving work. They receive no monies from any national organization or government entity.   For more information: www.humanemanatee.org

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C&S Wins Multiple Awards

 

Thank you sincerely, to our clients for all your support.  2015 is off to a great start....

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Condo - HOA Owners Face Increased Fees by Legislature

Barry Berkowitz: Key fact about estoppel bill: it's bad for homeowners

Barry-Berkowitz1

Two bills speeding through the legislature, CS/SB 736 and CS/CS/HB 611, are set to change complex and nuanced areas of real estate law. They deal with such arcane things as estoppel certificates and who pays what at real estate closings.  Those concepts may be complex to the average reader, so I’d like to frame it in terms everyone can understand: If these bills pass, homeowners’ association dues will go up.   How will they raise homeowner’s fees?

 

These bills create an artificial cap (Can you say “price fixing?”) on the fees charged by homeowners’ associations for their time and effort in researching and preparing what are known as “estoppel certificates” – which can often be a complicated process. Estoppel certificates are like an account statement of money owed by a homeowner to a homeowners’ association. They help determine how much needs to be paid and by whom.

 

The bills also require the homeowner’s association to provide this service without payment until the closing – or later – which can be several weeks or months after the service is provided. And if the closing doesn’t occur (or the requesting party decides not to pay), the homeowners’ association may have to go to court to get paid. The bills also penalize associations that cannot provide the certificate within the new, shortened deadline – by waiving payment of the fee.

 

If these bills pass, homeowners’ associations – and therefore, the homeowners themselves – will be on the hook for a host of fees, dues and additional costs.  And if that happens, literally millions of Florida residents will be forced to cover the costs that should be – and currently are – borne by a seller and a buyer in a private sales transaction. In short, CS/SB 736 and HB 611 will hurt average everyday Floridians and will do so in three distinct – and unfair – ways.

 

First, when someone is buying (for example) a condominium, and the owner hasn’t paid the association fees, the homeowner’s association must verify the outstanding balance. No problem. This however, often takes time as the actual number can be a moving target (as each month passes the dues/fees will continue to accrue) and sometimes it requires extra time to get an exact figure. The bills in question will shorten that time frame. If the homeowners’ association gets it wrong (thanks to being rushed) the homeowners may be stuck paying the difference – or they may be barred from collecting the correct, but higher, amount.

 

Second, the bills severely and artificially limit the fees to compile and produce such data – irrespective of the actual costs incurred to figure out the outstanding balance(s). If the actual costs are more than the capped fee arbitrarily picked by politicians, the homeowners are again stuck paying the difference.

 

Third, the bills allow the party requesting the service to delay payment. Instead of paying at the time service is rendered, the homeowners association only gets paid – if at all –after the closing. This delay will not only cost homeowners money (notice the recurring theme here), but if the fees are not paid, the homeowners will need to seek a court judgment to pay the fees. Who ends up paying for that? You guessed it, the other homeowners in the association.

 

This last point is especially unfair because if this bad idea were to become law, the homeowners would be the only ones providing a legally required service yet not getting paid until after the home is finally sold. No sale, no payment. This is a lot like someone getting a haircut and not having to pay for it for several weeks, while then forcing the salon to chase down the customer long after the service was provided. Nobody else in this kind of real estate transaction is subject to such unfair practices, nobody except the homeowners.

 

The issues behind the so-called estoppel bill are complex and are difficult for anyone but real estate attorneys to understand, but the impact of these bills is easy to grasp: if they pass, homeowners will see higher association dues and fees as a direct result of these measures becoming law.

 

Homeowners’ dues and fees will go up. It’s that clear and it’s that simple.

 

Barry Berkowitz, CPA is the Managing Director of Mayer Hoffman McCann P.C. an independent CPA firm. Mr. Berkowitz represents a 483-unit condominium association in Florida and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..Column courtesy of Context Florida.

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  185 Hits

Condo - HOA Owners Face Increased Fees by Legislature

Barry Berkowitz: Key fact about estoppel bill: it's bad for homeowners

Two bills speeding through the legislature, CS/SB 736 and CS/CS/HB 611, are set to change complex and nuanced areas of real estate law. They deal with such arcane things as estoppel certificates and who pays what at real estate closings.  Those concepts may be complex to the average reader, so I’d like to frame it in terms everyone can understand: If these bills pass, homeowners’ association dues will go up.   How will they raise homeowner’s fees?

Barry-Berkowitz1

These bills create an artificial cap (Can you say “price fixing?”) on the fees charged by homeowners’ associations for their time and effort in researching and preparing what are known as “estoppel certificates” – which can often be a complicated process. Estoppel certificates are like an account statement of money owed by a homeowner to a homeowners’ association. They help determine how much needs to be paid and by whom.

The bills also require the homeowner’s association to provide this service without payment until the closing – or later – which can be several weeks or months after the service is provided. And if the closing doesn’t occur (or the requesting party decides not to pay), the homeowners’ association may have to go to court to get paid. The bills also penalize associations that cannot provide the certificate within the new, shortened deadline – by waiving payment of the fee.

If these bills pass, homeowners’ associations – and therefore, the homeowners themselves – will be on the hook for a host of fees, dues and additional costs.  And if that happens, literally millions of Florida residents will be forced to cover the costs that should be – and currently are – borne by a seller and a buyer in a private sales transaction. In short, CS/SB 736 and HB 611 will hurt average everyday Floridians and will do so in three distinct – and unfair – ways.

First, when someone is buying (for example) a condominium, and the owner hasn’t paid the association fees, the homeowner’s association must verify the outstanding balance. No problem. This however, often takes time as the actual number can be a moving target (as each month passes the dues/fees will continue to accrue) and sometimes it requires extra time to get an exact figure. The bills in question will shorten that time frame. If the homeowners’ association gets it wrong (thanks to being rushed) the homeowners may be stuck paying the difference – or they may be barred from collecting the correct, but higher, amount.

Second, the bills severely and artificially limit the fees to compile and produce such data – irrespective of the actual costs incurred to figure out the outstanding balance(s). If the actual costs are more than the capped fee arbitrarily picked by politicians, the homeowners are again stuck paying the difference.

Third, the bills allow the party requesting the service to delay payment. Instead of paying at the time service is rendered, the homeowners association only gets paid – if at all –after the closing. This delay will not only cost homeowners money (notice the recurring theme here), but if the fees are not paid, the homeowners will need to seek a court judgment to pay the fees. Who ends up paying for that? You guessed it, the other homeowners in the association.

This last point is especially unfair because if this bad idea were to become law, the homeowners would be the only ones providing a legally required service yet not getting paid until after the home is finally sold. No sale, no payment. This is a lot like someone getting a haircut and not having to pay for it for several weeks, while then forcing the salon to chase down the customer long after the service was provided. Nobody else in this kind of real estate transaction is subject to such unfair practices, nobody except the homeowners.

The issues behind the so-called estoppel bill are complex and are difficult for anyone but real estate attorneys to understand, but the impact of these bills is easy to grasp: if they pass, homeowners will see higher association dues and fees as a direct result of these measures becoming law.

Homeowners’ dues and fees will go up. It’s that clear and it’s that simple.

Barry Berkowitz, CPA is the Managing Director of Mayer Hoffman McCann P.C. an independent CPA firm. Mr. Berkowitz represents a 483-unit condominium association in Florida and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..Column courtesy of Context Florida.

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  197 Hits

Condo/HOA Owners Facing Increased Fees by Legislature

 

Two bills speeding through the legislature, CS/SB 736 and CS/CS/HB 611, are set to change complex and nuanced areas of real estate law. They deal with such arcane things as estoppel certificates and who pays what at real estate closings.  Those concepts may be complex to the average reader, so I’d like to frame it in terms everyone can understand: If these bills pass, homeowners’ association dues will go up.   How will they raise homeowner’s fees?

Barry-Berkowitz1

These bills create an artificial cap (Can you say “price fixing?”) on the fees charged by homeowners’ associations for their time and effort in researching and preparing what are known as “estoppel certificates” – which can often be a complicated process. Estoppel certificates are like an account statement of money owed by a homeowner to a homeowners’ association. They help determine how much needs to be paid and by whom.

The bills also require the homeowner’s association to provide this service without payment until the closing – or later – which can be several weeks or months after the service is provided. And if the closing doesn’t occur (or the requesting party decides not to pay), the homeowners’ association may have to go to court to get paid. The bills also penalize associations that cannot provide the certificate within the new, shortened deadline – by waiving payment of the fee.

If these bills pass, homeowners’ associations – and therefore, the homeowners themselves – will be on the hook for a host of fees, dues and additional costs.  And if that happens, literally millions of Florida residents will be forced to cover the costs that should be – and currently are – borne by a seller and a buyer in a private sales transaction. In short, CS/SB 736 and HB 611 will hurt average everyday Floridians and will do so in three distinct – and unfair – ways.

First, when someone is buying (for example) a condominium, and the owner hasn’t paid the association fees, the homeowner’s association must verify the outstanding balance. No problem. This however, often takes time as the actual number can be a moving target (as each month passes the dues/fees will continue to accrue) and sometimes it requires extra time to get an exact figure. The bills in question will shorten that time frame. If the homeowners’ association gets it wrong (thanks to being rushed) the homeowners may be stuck paying the difference – or they may be barred from collecting the correct, but higher, amount.

Second, the bills severely and artificially limit the fees to compile and produce such data – irrespective of the actual costs incurred to figure out the outstanding balance(s). If the actual costs are more than the capped fee arbitrarily picked by politicians, the homeowners are again stuck paying the difference.

Third, the bills allow the party requesting the service to delay payment. Instead of paying at the time service is rendered, the homeowners association only gets paid – if at all –after the closing. This delay will not only cost homeowners money (notice the recurring theme here), but if the fees are not paid, the homeowners will need to seek a court judgment to pay the fees. Who ends up paying for that? You guessed it, the other homeowners in the association.

This last point is especially unfair because if this bad idea were to become law, the homeowners would be the only ones providing a legally required service yet not getting paid until after the home is finally sold. No sale, no payment. This is a lot like someone getting a haircut and not having to pay for it for several weeks, while then forcing the salon to chase down the customer long after the service was provided. Nobody else in this kind of real estate transaction is subject to such unfair practices, nobody except the homeowners.

The issues behind the so-called estoppel bill are complex and are difficult for anyone but real estate attorneys to understand, but the impact of these bills is easy to grasp: if they pass, homeowners will see higher association dues and fees as a direct result of these measures becoming law.

Homeowners’ dues and fees will go up. It’s that clear and it’s that simple.

Barry Berkowitz, CPA is the Managing Director of Mayer Hoffman McCann P.C. an independent CPA firm. Mr. Berkowitz represents a 483-unit condominium association in Florida and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..Column courtesy of Context Florida.

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Tampa Tribune Reports on Bad Bills in Legislature

http://www.politicalfixflorida.com/2015/03/25/change-to-obscure-real-estate-law-could-cost-homeowners/

FLORIDA BUSINESS, LEGISLATION

 

CHANGE TO OBSCURE REAL ESTATE LAW COULD COST HOMEOWNERS

 

MARCH 25, 2015

 

Every year, besides the high-profile issues, lawmakers are asked to consider arcane, highly technical changes to state law. Add “estoppel letters” to the list of down-in-the-weeds subjects being legislated this session. What letters, you ask? Take a deep breath …

 

Estoppel letters, also known as estoppel certificates, are sent by a homeowner’s association for a real estate closing, detailing any amount owed. Usually, what’s due is unpaid association fees by owners who defaulted on their mortgage, but it could also include fines and other debts. The idea is to get the amount built into the settlement statement, so the association can get paid.

 

Legislation filed this session would, among other things, shift the cost of preparing estoppel letters from Realtors® and title companies to the associations themselves – meaning, ultimately, homeowners themselves will pony up.

 

Preparing the letter itself takes time and some research, and costs as little as $15 in some areas. Elsewhere, it can reach a high of $300-$400 in places like South Florida, which still has a considerable inventory of foreclosed condos and other “distressed properties.”

 

A Senate bill (SB 736) was temporarily postponed earlier this week, while a House measure (HB 611) was cleared by the Business and Professions subcommittee.

   

The latest version of the House bill caps the fee for an estoppel letter at $300 but the Senate measure only says the fee shall be “reasonable … as determined by the cost of providing such information.”

 

The Senate measure also says, “If the closing does not occur within 60 days after the date the estoppel certificate is delivered, the estoppel certificate fee is the obligation of the parcel owner …”

 

Stay tuned …

 

–James L. Rosica (@jlrosicaTBO)

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Two Bills Needing Defeat in Tallahassee

Example Image
A Message from Chapter President Alan Garfinkel
Alan Garfinkel
 

CAI Central Florida
Chapter 2015 President
 

 

Dear Friend,

As you may already be aware, there are two (2) bad bills moving through the Legislature this Session, House Bill (HB) 611 sponsored by Representative John Wood (R- Winter Haven) and Senate Bill (SB) 736 sponsored by Senator Kelli Stargel (R-Lakeland) that are devastating to community associations across the state. 

CAI's Florida Legislative Alliance (CAI FLA) is the official voice of CAI on legislative issues and represents CAI Chapters throughout Florida. CAI FLA has taken a strong and decisive position against HB 611 and SB 736 because the default provisions of these bills would increase a Community Association's exposure to losses and litigation. In addition the arbitrary rates set by the bill is in direct conflict with negotiated market rates leaving homeowners to absorb the difference between an artificial rate and actual costs of community association services. Ultimately, the result of this proposed law unfairly shifts costs from an individual buyer or seller of a property to the community association. These financial losses will be paid by millions of Homeowners living in community associations throughout Florida. This legislation is very harmful to community associations and all businesses that support community associations.

We ask you help us defeat these bills by contacting the members of the House Business and Professions Subcommittee TODAY, Tuesday, March 24th,  concerning HB 611 by clicking here and the members of the Senate Committee on Regulated Industries regarding SB 736 listed below: 
 
Senator Rob Bradley D-7 (Chair of the Committee) 
Phone:  850-487-5007 
Email:  This email address is being protected from spambots. You need JavaScript enabled to view it. 
  
Senator Gwen Margolis D-35 (Vice Chair of the Committee) 
Phone:  850-487-5035 
Email:  This email address is being protected from spambots. You need JavaScript enabled to view it. 
  
Senator Joseph Abruzzo D-25 
Phone:  (850) 487-5025 
Email:  This email address is being protected from spambots. You need JavaScript enabled to view it. 
  
Senator Jack Latvala D- 20 
Phone:  850-487-5020 
Email:  This email address is being protected from spambots. You need JavaScript enabled to view it. 
  
Senator Garret Richter D-23 
Phone:  850-487-5023 
Email:  This email address is being protected from spambots. You need JavaScript enabled to view it. 
  
Senator Maria Sachs D-34 (Her Husband is an HOA Attorney) 
Phone:  850-487-5034 
Email:  This email address is being protected from spambots. You need JavaScript enabled to view it. 
  
Senator Aaron Bean D-4 
Phone:  850-487-5004 
Email:  This email address is being protected from spambots. You need JavaScript enabled to view it. 
  
Senator Oscar Braynon D-36 
Phone-  850-487-5036 
Email:  This email address is being protected from spambots. You need JavaScript enabled to view it. 
  
Senator Miguel Diaz de la Portilla D-40 
Phone:  850-487-5040 
Email:  This email address is being protected from spambots. You need JavaScript enabled to view it. 
  
Senator Anitere Flores D-37 
Phone:  850-487-5037 
Email:  This email address is being protected from spambots. You need JavaScript enabled to view it. 
  
Senator Joe Negron D-32 
Phone:  850-487-5032 
Email:  This email address is being protected from spambots. You need JavaScript enabled to view it. 
  
Senator Kelli Stargel D-15 (Bill Sponsor) 
Phone:  850- 487-5015 
Email:  This email address is being protected from spambots. You need JavaScript enabled to view it. 
 

Below is the message we would like you to email:

Dear Legislator:

On behalf of the community associations in your District, I urge you to oppose HB 611 and SB 736. This legislation will have a negative impact to community associations by drastically changing the way the estoppel process is carried out by tens of thousands of associations throughout FL. The bills ignore the assumption of liability associations and their authorized agents maintain that lies at the heart of the estoppel process. Furthermore, if associations are required to do the work of accurate estoppel preparation before getting paid for their services and then chase after any fee, (which HB 611/SB736 artificially predetermines regardless of association agreements and legal liability), additional collection costs will be incurred. 

Again, please vote No on HB 611 and SB 736.

The communities that you, your parents and grandparents live in and we all serve need your help NOW. Please email and call the highlighted State Senators NOW, Tuesday, March 24th. They are voting on these bills today. 

Thank you for your prompt action.

Sincerely,                                                                     
Alan Garfinkel
President, CAI Central Florida 

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Visit Us at CA Day 2015

Hope to see everyone at CA Day 2015 on March 11th!  C&S is a major sponsor and you can visit us at booth 304.  

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  222 Hits

2015 Board Member Forum is tomorrow!

Reminder. The 2015 Board Member Forum is tomorrow! Hope to see you there!

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FHFA Works Against Community Asssociations

Reprinted from 

FHFA Takes Sides in War Between Lenders & Community Associations Over Priority Liens

by Andrea Drennen

lender-association-war

For those of you who were busy enjoying the holidays around the end of December, you may have missed a little bit of news that came out of CAI on December 23rd regarding a public statement made by the Federal Housing Finance Agency (FHFA), which stated that super-priority liens from Homeowners Associations violated the right of Fannie Mae and Freddie Mac to have first position, and increased the risk of loss to taxpayers:

 

One of the bedrock principles in this process is that the mortgages supported by Fannie Mae and Freddie Mac must remain in first-lien position, meaning that they have first priority in receiving the proceeds from selling a house in foreclosure.  As a result, any lien from a loan added after origination should not be able to jump in line ahead of a Fannie Mae or Freddie Mac mortgage to collect the proceeds of the sale of a foreclosed property."
 - Federal Housing Finance Agency on Certain Super Priority Liens

While the "increased risk of loss to taxpayers" is an easy button for the FHFA to push, it ignores the reality that the lenders whose loans they guaranteed are the ones responsible, not the HOAs.

Essentially, the FHFA is suing to strike down the first priority status of HOAs in priority lein states to ensure that Fannie Mae and Freddie Mac get paid by the lending institutions that failed to complete foreclosures in a timely manner, or pay HOA dues while foreclosure procedures were underway (both circumstances that would have avoided any lawsuits in the first place). 

 

Make no mistake, FHFA is bailing out mortgage servicers that lacked the competency to meet basic contractual requirements and follow established rules of civil procedure," said Thomas M. Skiba, CAE, chief executive officer of Community Associations Institute (CAI). "By suing community associations, FHFA is trying to protect Fannie and Freddie at the expense of association homeowners. That's unfair, unconscionable and unacceptable."
 - CAI: FHFA Move Threatens Associations & Owners

Priority lien laws for community associations are currently active in 22 states and the District of Columbia. Many of these state laws share common language, having been adapted from the Uniform Common Interest Ownership Act of 19821994 or 2008. According to their website, the purpose of the Uniform Law Commission, who drafted this law, is to provide states with "non-partisan, well conceived, and well drafted legislation that brings clarity and stability to critical areas of state statuatory law." In spite of these laws having been in place for more than 10 years in some cases, they are frequently challenged in court, especially after the recent mortgage crisis.

One abandoned home in a community represents a serious financial commitment by the other homeowners in the HOA. HOAs simply cannot afford to wait until lenders get their act together.

Following the mortgage crisis, many lenders have been particularly slow to foreclose on homes, in part because banks are incentivized not to foreclose (warning, that link may not be safe for work), and in part because the loan packages were broken up and sold in fractions, a practice that many believe contributed to the bursting of the housing bubble, and most certainly prevented lenders from being able to wholly collect on debts, and in some cases to even identify which debts were owed to them. This delay caused a number of delinquent homeowners to simply walk away from their homes, rather than waiting for the bank to do something.

Unfortunately for homes in community associations, delays in the foreclosure process do not prevent the home from accumulating costs. The primary function of the Homeowners Association is to preserve the value of the homes in the community. Allowing the home to fall into disrepair breaks the contract for the entire neighborhood. Many HOAs have gone so far as performing regular preventive maintenance on the abandoned homes (such as mowing lawns, cleaning gutters and power washing). Compound that by the lost income of the regular assessments used to maintain common areas in the association, a cost which must be made up by the other members of the association.

In other words, one abandoned home in a community represents a serious financial commitment by the other homeowners in the HOA. HOAs simply cannot afford to wait until lenders get their act together.  

Enter the super-priority lien, an option that allows community associations in these states an opportunity to recover these vital costs, even over the primary lender. But the FHFA disagrees, and this is why the president of CAI is steaming mad:

 

In one case, Fannie Mae’s servicers failed to respond to legal service of process and, despite mandatory notification pursuant to Nevada law, failed to appear at a foreclosure auction to protect Fannie Mae's financial interests," Skiba continued. "It says a lot about FHFA priorities that the agency now is suing to recoup Fannie Mae's losses from the pockets of community association homeowners, rather than suing servicers for breach of contract. Someone must stand up for homeowners and that’s what CAI will continue to do."
 - CAI: FHFA Move Threatens Associations & Owners

While we can expect to see lawsuits on this issue for several years to come, one state to watch is Nevada, where a recent decision by the Nevada Supreme Court seems to be in agreement that it is the lenders who are at fault here, not the HOAs. In a opinion filed September 18, 2014, the court had this to say:

 

U.S. Bank's final objection is that it makes little sense and is unfair to allow a relatively nominal lien—nine months of HOA dues—to extinguish a first deed of trust securing hundreds of thousands of dollars of debt. But as a junior lienholder, U.S. Bank could have paid off the SHHOA lien to avert loss of its security; it also could have established an escrow for SHHOA assessments to avoid having to use its own funds to pay delinquent dues. 1982 UCIOA § 3-116 cmt. 1; 1994 & 2008 UCIOA § 3-116 cmt. 2. The inequity U.S. Bank decries is thus of its own making and not a reason to give NRS 116.3116(2) a singular reading at odds with its text and the interpretation given it by the authors and editors of the UCIOA."
 - Nevada Supreme Court, SFR Invs. Pool 1, LLC v. U.S. Bank, N.A.

It's easy to see why the bank in this case felt that the issue 'made little sense'. After all, their loan amount was for $880,000 whereas the HOA's lost fees amounted to less than $10,000. However, as the justices stated, all legal process was followed by the HOA and the bank had been notified on several occasions. Plenty of opportunity was given to the bank to protect their investment and they did not avail themselves of it. Therefore, according to the Nevada supreme court, the problem was of the bank's own making, and no fault of the HOA.

Now that they are losing money, lenders are taking action, the FHFA is right with them. The battle lines are drawn and the vultures are circling. Hopefully, this battle will have a peaceful resolution, where everyone gets what they are due. Until then, we will continue to have hope that lenders will simply do what they should have done from the beginning, and faith that the courts have everyone's best interests at heart.


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C&S Wins Readers Choice Award

A very sincere thank you to our clients for voting C&S the 2015 Readers Choice Platinum Winner in the management category.

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2015 Board Member Forum - Reserve Your Seat

The 2015 Board Member Forum will be here shortly at the beautiful Manatee Performing Arts Center. In addition to the morning and afternoon sessions of information and education, breakfast and lunch from Pier 22 Restaurant is also provided. During the breaks, thirty service providers, specializing in community associations, will have tables set up throughout the lobbies, to answer your questions about their services. If you are an HOA or condo board member, or may become a board member in the future, you will want to attend and earn your State required Board Certification. The event is February 19th and it is provided at no charge, just contact us and reserve your seats. We hope to see you there!

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CAI Urges Congress to Extend TRIA Program

News from CAI...

The 113th Congress had adjourned without extending the Terrorism Risk Insurance Act (TRIA). Legal authority for the TRIA program expired on December 31, 2014 and Congress has just reconvened January 6, 2015.

"CAI will continue to monitor developments on Capitol Hill and at the White House to ensure the 114th Congress takes up an extension of the TRIA program as a first order of business," said Dawn M. Bauman, CAI's Senior Vice President for Government Affairs. "Community associations carrying terrorism insurance coverage should consult their insurance agent to determine if their policy is impacted by Congress' failure to act."

The TRIA program was established in the wake of the terrorist attacks of September 11, 2001, as insurance carriers withdrew from the terrorism insurance market. The TRIA program is a federal government backstop against terrorism-related property and casualty losses. The program has stabilized the market for terrorism insurance coverage, lowering premiums and increasing coverage availability.

CAI's Bauman said, "As our country tragically knows too well, acts of terrorism are a real and devastating threat. The TRIA program is a proven and effective way for community associations to insure against acts of terror. Our communities require certainty in the terrorism insurance marketplace and TRIA should be extended without further delay."

A 2013 federal government study demonstrated the effectiveness of the TRIA program, noting a consistent decline in terrorism insurance premiums and increased coverage capacity since 2003. Through the TRIA program, the federal government acts as a reinsurer, allowing private insurance companies to determine maximum losses in the event of a certified act of terrorism against the homeland.

CAI Government Affairs represents the interests of the 65 million people living and working in America's community associations on legislative and regulatory issues at the local, state, and federal level of government.  For more information about the Community Associations Institute go to: www.caionline.org

 

 

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Happy New Year 2015!!

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Happy Holidays!

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C&S Board Member Forum Coming Soon

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Holiday Schedule for 2015 and Balance of 2014

2015 Holiday Schedule

 

Date

Holiday

Day of Week

Days Closed

Jan. 1

New Year's Day

Thursday

1 day

Jan. 19

Martin Luther King Jr. Day

Monday

1 day

Feb. 16

Presidents' Day

Monday

1 day

May 25

Memorial Day

Monday 

1 day 

July 3

Independence Day

Friday

1 day

Sept. 7

Labor Day

Monday

1 day

Nov. 11

Veterans' Day

Wednesday

1 day

Nov. 26

Thanksgiving Day 

Thursday

1 day

Nov. 27

Thanksgiving Friday

Friday

1 day

Dec. 24

Christmas Eve

Thursday

1 day

Dec. 25

Christmas Day

Friday

1 day

 

2014 Holiday Schedule Remaining

 

Date

Holiday

Day of Week

Days Closed

 Nov. 27

Thanksgiving Day 

Thursday

 1 day

 Nov. 28

Thanksgiving Friday 

Friday

 1 day

 Dec. 24

Christmas Eve

Wednesday

 1 day

 Dec. 25

Christmas Day

Thursday

 1 day

 

 

 

 

 

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Bradenton

4301 32nd Street West
Suite A-20
Bradenton, Florida 34205
Phone: (941) 758-9454
Fax: (941) 753-3062

Sarasota

4672 Fruitville Road
Sarasota, Florida 34232
Phone: (941) 377-3419
Fax: (941) 377-6218

Saint Petersburg

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Suite 900
Saint Petersburg, Florida 33701
Phone: (727) 456-0027
Fax: (866) 890-0548

Venice

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Suite 230
Venice, Florida 34285
Phone: (941) 786-3552
Fax: (866) 890-0548
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