HOAleader.com - Tip of the Week - July 22, 2016
Published: Fri, 07/22/16
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Strong Allegation: Condos Are Fleecing Residents
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In this week’s tip, we nudge you and ask, “Do your fees break your state’s
laws?”
Apparently, many condos in Miami do just that. The Miami Herald has
published an analysis of fees charged by local condo associations to owners
and renters concluding that many are “ripping off” residents in violation
of state law—and it predicts the practices could lead to class action
lawsuits against the associations.
Florida law on condo fees can be broken down fairly simply.
Condos can charge potential residents a transfer fee, often considered a
screening fee, that can’t exceed $100, reports Joshua Krut, a partner at
Kopelowitz Ostrow Ferguson Weiselberg Gilbert in Fort Lauderdale, Fla.,
and they can’t charge a fee for a lease renewal.
But there’s a catch. Condos can charge a screening fee only if their
declaration permits them to screen potential residents—and Krut says most
declarations don’t permit that.
“This is a heavily abused area of the law because I think frankly $100 doesn’t
cover the association’s costs,” adds Krut. “Part of the problem is an
education issue. But it could also be that blind eyes are being turned
because $100 isn’t enough to cover their costs—that’s the bottom line. I
don’t think associations are looking to get rich off this. They’re just
trying to break even.”
The problem is that according to the Miami Herald’s analysis of MLS listings
of condos in Miami-Dade County, 46 percent of condos listed for rent or sale
included a fee of more than $100 per applicant. In Broward County, 22 percent
of condos in the MLS had application fees higher than $100.
One condo, Quantum on the Bay, had a $625 total transfer fee. “That could be
too high,” notes Krut.
Since the Herald’s investigation was published, Krut says he’s fielded
many calls. “A lot of people who called to ask about that weren’t necessarily
clients but a lot of management companies,” he says. “I told them the limit is
$100, and you need to stick with it. That’s what the rule is.”
Arizona has a similar rule, but the ceiling is higher. “In Arizona, there was
a controversy over transfer fees,” explains Steve Cheifetz, a partner at
Cheifetz Iannitelli Marcolini in Phoenix. “When you sell a condo or home, in
theory the association can charge to cover administrative costs for the
management company to switch over their records, and those fees used to be
somewhat small, maybe $100.
“Then there were issues about some charges being too high, so the
legislature passed a cap of $400 on transfer fees,” notes Cheifetz. “Some
management companies were charging less, and they saw that as an excuse to
raise their fee to $400. Typically, there’s a provision in the management
agreement that the management company keeps the transfer fees to recover
the cost of its administrative expenses. Management companies will
sometimes buy out another management company, and one of the sources of
income is how much the management company gets in transfer fees. They’re
gravy because they’re not much associated with the actual administration
costs, which are certainly less than $100.”
The idea of charging improper or too-high fees is a common problem at condos
and HOAs. Read about Condos Illegally “Ripping Off” Residents with
Improper Fees in our new article:
http://www.hoaleader.com/members/1403.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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Here's What Happens When You're Loose With Your Building's Access
In this week's tip, we tell you about a Minnesota court ruling challenging a
condo association's practice of allowing police unfettered access to
common areas.
Click here to read full article:
http://www.hoaleader.com/public/Heres-What-Happens-When-Youre-Loose-With-Your-Buildings-Access.cfm
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Condos Illegally "Ripping Off" Residents with Improper Fees
The Miami Herald has published an analysis of fees charged by local condo
associations to owners and renters concluding that many are "ripping
off" residents in violation of state law--and it predicts the
practices could lead to class action lawsuits against the associations.
Click here to read full article:
http://www.hoaleader.com/members/Condos-Illegally-Ripping-Off-Residents-with-Improper-Fees.cfm
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Leaving an HOA Building Key for First Responders: Here's One Outcome
A Minnesota court has ruled that a condo owner had no expectation of privacy
in the hallway of his condo association--even though the police entered the
condo by using a key left by the manager for emergencies. Here we explain the
case, and our experts discuss whether they'd advise a board to leave a key so
local authorities can access their private community.
Click here to read full article:
http://www.hoaleader.com/members/Leaving-HOA-Building-Key-for-First-Responders-Heres-One-Outcome.cfm
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What If Your New Policy Contradicts Your HOA's Bylaws?
An HOAleader.com reader asks, "Our association recently created an
accommodation policy for support animals (as we've been told is required by
law) that contradicts our current bylaw that states 'no owner can house any
type of animal.' Is it required that we amend/change our bylaw, or can we
continue to have a policy that contradicts a bylaw?"
Click here to read full article:
http://www.hoaleader.com/members/What-Your-New-Policy-Contradicts-Your-HOAs-Bylaws.cfm
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What Are HOA District Reps and Delegates?
Sunrise Ridge HOA in Wonder Lake, Ill., lists in its newsletter its board
members, along with eight "district representatives" and six
"delegates." Here we discuss what owners who serve in those
positions do, and our experts talk about the pros and cons of creating such
positions.
Click here to read full article:
http://www.hoaleader.com/members/What-Are-HOA-District-Reps-Delegates.cfm
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