A HOMEOWNER has sought out legal advice after her association implemented a surprise charge for new residents.
The anonymous individual reached out to a lawyer to ask about a $900 fee that her condominium association has taken to charging new move-ins.
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Called a “capital contribution” the concerned homeowner reached out to TC Palm and contribution legal staff for answers regarding the shocking fee.
The owner explained that they lived in an association that has over 400 units, each facing the fee as new residents move in.
“Is such a capital contribution allowed under the Florida Condominium Act?” asked the homeowner.
Unlike a homeowner’s association, which is beholden to its own set of legal statutes, a condominium association is governed by a unique set of laws – in Florida, those laws are known as the Florida Condominium Act.
Destiny Goede, from Goede, DeBoest & Cross, specializes in law related to community associations in Florida focusing on “condominium and homeowner association law, real estate law, civil litigation, estate planning and commercial transactions.”
Goedo explained that if the questioner’s association is in fact categorized as a condominium association, then they are likely violating the law.
She explained that this categorization would make the association governed by Chapter 718, and Section 718.112(2)(i) is what covers the issue at hand.
“An association may not charge a fee in connection with the sale, mortgage, lease, sublease, or other transfer of a unit unless the association is required to approve such transfer and a fee for such approval is provided for in the declaration, articles, or bylaws,” reads the law.
“Any such fee may be preset but may not exceed $150 per applicant.”
Goede simplified the law, explaining that the questioner’s association would have to have paperwork dictating a fee is included when someone chooses to live on the property.
“As provided in the statute above, a condominium association’s ability to collect a fee from new owners is limited to those associations which are required by their governing documents to approve transfers,” she wrote.
Furthermore, there is a $150 upper limit on how much the association can charge, even with the proper policies in place.
“A condominium association may not charge a capital contribution fee of $900 for new owners,” wrote Goede in conclusion.
What is an HOA?
One in five Americans live in an area with a Homeowners’ Association – or HOA. But what exactly is it that they do?
- An HOA is a homeowner’s association – an organization that aims to maintain a clean and cohesive place to live for its residents.
- Entire neighborhoods, subdivisions, condominiums, family homes, or townhouses within “a planned development” will often make up an HOA.
- They also act as a governing body for tenants, who run and fund the HOA through monthly fees.
- Their principal aims are to keep the community functioning and visually appealing and to maintain property values.
- They primarily focus on common areas of a neighborhood, such as roads, parks, and pools – but may also stipulate what residents can do with their properties, such as yards and driveways.
- Often these restrictions enforce uniformity on properties, for example, ensuring most houses look the same and all driveways are clear of weeds.
- An HOA rulebook of covenants, conditions, and restrictions (CC&R) is distributed to all residents, and an elected volunteer board of directors enforces these regulations.
- Breaking these rules can result in penalties such as fines and even litigation – as most HOAs are incorporated and subject to state law.
- HOAs are often the subject of controversy, with some members feeling that the rules are too punitive and restricting, or that the leadership has too much power.
- But others like that HOAs give communities the power of self-governance, and can ensure a degree of harmony between residents.
She only caveats that her advice is not applicable if the questioner’s association is governed by the set of laws meant to keep homeowner’s associations in line, Chapter 720.
LEGAL FEARS IN FLORIDA
Homeowner’s associations and other community setups of the like have a lot of power in controlling their resident’s decisions and financials.
Between community standards, which are punishable by fees, and other policy-included expenses, residents commonly face trouble with navigating HOA laws and their own rights.
Florida HOA residents’ concerns grew at the end of 2023, as a new state law seemed like it would astronomically impact their fee amounts.
In 2021, Florida lawmakers passed Senate Bill 4D, which required milestone inspections for condominiums, following the deaths of nearly 100 people in the Surfside Condo Collapse.
This law hit HOAs hard and resulted in inspection fees being included in many community fees.
Simultaneously, with rising natural disasters and other geographic risks, Citizens Property Insurance, a taxpayer-backed company announced that there are plans to shed thousands of HOA-related policies.
Other insurance companies are planning to hike up insurance costs, which might also lead to HOA residents paying more.
“The maintenance guy and I walk through this building every week,” Dan Severson, President of the condo association told a local ABC affiliate.
“Our last property insurance policy was 50 pages long. It is so full of exclusions and high deductibles that it’s almost like no insurance at all.”
He noted that in 2023, the insurance cost for the association was $600,000, nearly 13 times the amount the paid in 2019.
“It could quadruple the cost of living in this condo. And that would be devastating to a lot of fixed-income senior people,” said Severson.
He predicted that his association’s monthly dues will increase from $500 to $,3000, which would force some residents to move.
“I’ve asked the lawyer what would happen if we just refused to comply. And she said, well, you could go to jail,” Severson said.
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