Donna Collins, who pays rent on the Kissimmee home she shares with her elderly mom, faces a new threat of eviction starting next week when Florida law allows homeowner associations to pursue renters, not just landlords, for overdue fees.
If the owner falls behind and the renter doesn't cover the deficit, the renter faces eviction under the new statute, which takes effect July 1.
"What it boils down to is that we've got the homeowner association on one side saying, 'If you don't pay us for the fees, we're going to evict you,' " said Collins, whose landlord owes thousands in back fees. "And on the other side you've got a landlord saying, 'If you don't pay me the rent, then I'm going to evict you.' What's a tenant to do?"
The issue of delinquent homeowner fees has become pervasive in Metro Orlando, which led the nation in rental and homeowner vacancies during the first quarter, according to U.S. census figures. The census reported that 8.9 percent of all homes and condos were unoccupied and 20.6 percent of all rentals were empty — the highest vacancy rates among the nation's 75 largest metro areas.
In the past, tenants paid only rent to their landlords, who were supposed to pay any community fees associated with the house or condo unit. If a landlord failed to pay the fees, a homeowner or condo association could file a lien or ask a judge for title to the property. But both options took time and came with legal fees that were tough for cash-starved associations to pay.
The new law allows associations to collect fees directly from renters if the owner-landlords don't pay up.
"I feel bad for the tenants. They're being put in the middle of the situation," said Frayda Morris, owner Central Association Management of Kissimmee, which has sent notices to Collins and other renters. "But the big picture is that they are in the home paying rent, and the investor, he's collecting rent but he's not paying assessments, not paying the mortgage."
Collins said her adult son, who also lives with her, was renting in Tampa but was booted from his home when the bank foreclosed on it. So before renting the Kissimmee house, she said, they checked with the property-management company that was showing the rental to make sure the owner wasn't late on association payments.
But after signing the lease, they discovered that the property was headed to foreclosure. And now Collins has learned that her landlord wasn't paying the association fees either.
Investor-owners whose reaction to the housing slump has been a "strategic default" — walking away from the mortgage on a devalued home or condo even though they can afford to pay — also stop paying their association fees. That trend, combined with an increase in the number of unemployed residents who can't afford fees, have made it difficult for homeowner and condo associations to maintain pools, roofs and sidewalks. And the resident-owners who continue to pay resent covering for absentee owners who don't.
"What we get is: 'Why do we have to pay for people who don't pay?' " said Morris, who has worked in property management for 29 years.
The new law may ease financial problems for homeowner and condo associations, but questions remain about how it will be put into effect.
For starters, it's not entirely clear how much of a rental's delinquent-fee bill a tenant will be expected to pay, said David Muller, a Sarasota lawyer who specializes in association law.
And many associations may have trouble assessing tenants, Muller said, because no one necessarily tracks which properties in a community or complex are rentals, who is renting them and how much they are paying.
"There are some questions about exactly how this is going to work," he said. "The good news about this is that it's going to give associations another mechanism to get paid on these unpaid assessments. But it does provide a host of questions, with issues not addressed in the statutes, and it will invariably be challenged in the courts."
One of legislation's co-authors, state Sen. Jeremy Ring, D-Margate, said the law was intended to ensure that everyone pays a fair share. He noted that renters have always faced eviction when their landlords fail to pay fees or mortgages; this measure just makes the system more efficient by giving associations an option other than filing a lien or going to court.
"If a renter isn't paying their maintenance fees, they should be offered no protections because they're harming every unit owner," Ring said Thursday.
In terms of actually putting the law to work, Ring said the measure was "admittedly gray" in determining how much renters should owe of the back fees that accrue while they are living in a particular house or condo. He said that "loophole" may need to be addressed by the courts.
Collins said she likes the layout of the four-bedroom house she's renting and has even tried to buy it from the owner. So far, that hasn't happened.
And now, she said, the owner has made it clear that he'll move to evict her if she pays the association fee instead of his rent.
This story was first published by the Orlando Sentinel on June 28, 2010.