As an attorney, one thing that I have always said is that the worst job in the world is board member of your condominium association or HOA. I have a few friends and clients who take on this thankless task.  One of our firm attorneys is a former HOA board member of his community and has moved up to his community’s Community Development District.  My secretary of over 25 years, who sees this first hand on a daily basis, is secretary of her own condo board.  She knows better!  My father, who is an elected city commissioner (which is another story in and of itself) has simultaneously (though not currently) been president of his condo association.  He has convinced my mother to serve on the condo board while he sits out for a few years.  Crazy!

Me, not a chance! We have lived in our community of 1500 homes for over 22 years.  We pay our assessments and keep our property clean and follow the rules.  The HOA does a great job and, in the time we have lived here, our assessments have remained steady, going up an average of about $3 per month each year.  You can imagine my surprise, shock even, when I received the annual budget a few weeks ago and the notice or our assessment for 2018.  The increase was $29 per month, a 16% increase.  The board explained that $25 of the increase is directly related to Hurricane Irma repairs and will be for 2 years only.

The explanation seemed reasonable and I have to trust the judgment of the board since I have no desire to be involved in the process. However, I can imagine the heat that board members are taking over this decision.  I am sure they are being bombarded by calls and emails as well as unpleasant conversations with neighbors while walking their dogs or shopping at Publix.  (Note that I have no idea who our board members are so none would hear from me if I were moved to object).

The real estate attorney in me does question why a $600 assessment ($25 x 24 months) is necessary following Hurricane Irma. My knowledge of the community damage is obviously limited to what I have observed walking and driving through the neighborhood.  To me, the damage seems less extensive than following Hurricane Wilma 11 years ago.  We seemed to have fewer trees down this time.  Perhaps sidewalk damage was more extensive this time (from uprooted trees), but the HOA has a sidewalk repair line item in the budget as our trees continue to mature and roots damage the sidewalks.  But the year following Wilma, our assessments did not increase outside of the normal range.

What about insurance and reserves? Did the board reduce our coverage and resources so that the HOA was more exposed following Irma than we were following Wilma?

There are countless other questions that I could ask. But if I ask, someone might push me to get involved.  And that brings me back to the beginning.  There is no job worse than HOA/Condo board member.  Therefore, I will continue to pay my assessments and let someone else have the job, thank you.

Good Credit Score

        HOA’s may soon have more leverage to collect assessments from chronically late paying and delinquent homeowners. Call it an “incentive”. Sperlonga, a credit data aggregator, will become the first company to furnish HOA payment and account status data to Equifax. A test run will begin in August with full reporting planned for October. Once Equifax receives the data (perhaps the other reporting agencies will join at a later date), homeowners’ credit scores will be affected in the same manner as mortgages affect credit scores. On-time payments will have a positive impact on credit scores, while late and delinquent payments will have a negative impact on scores.

             Until now, HOA payments have not been reported. Matt Martin, chairman of Sperlonga said in a prepared statement that the new service “will help elevate Association payments to the same level of importance as the consumer’s other financial obligations”. Associations might see this as good news as owners will have more incentive to make timely payments of their maintenance obligations.

             However, critics argue that assessments are not the same as mortgages or other loans as associations do not provide financing for purchased goods. They provide maintenance and service only.

             Florida, obviously, has thousands of HOAs and condo associations. Over the next few months, associations boards should be in touch with their property managers to determine the cost of reporting to Sperlonga and the overall benefits to the association.

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    Welcome to Assouline & Berlowe’s Florida Real Estate Law and Investment Blog with news, insights, and commentary for investors, developers, and their advisors.


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