Florida Bill Limits Banks’ HOA Obligations

Among the provisions stipulated in Florida's newly revised House Bill 319 are enhanced specifications regarding banks' obligations to homeowner associations (HOAs).
[IMAGE] When a bank forecloses on a home, it potentially absorbs liabilities from unpaid homeowner or condo association fees, often compounded by late fees and attorney fees.

Reps. George R. Moraitis (R-Fort Lauderdale) and Fed Costello (R-DeLand) co-sponsored House Bill 319, providing

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banks clarification on just how much liability they incur regarding unpaid association fees.

According to the bill, a bank that absorbs a property through foreclosure is responsible for any unpaid homeowner association expenses that accrued during the 12 months prior to the bank's acquisition of the property or 1 percent of the original mortgage debt â€" whichever amount is less.

Under the updated bill, banks are not, however, responsible for late fees or attorney fees.

Without laws to protect banks from incurring excessive fees from community associations, some banks may be hesitant to lend to borrowers whose properties have homeowner associations, Anthony DiMarco, spokesman for the Florida Bankers Association, told the local newspaper the ""_Sun Sentinel._"":http://www.sun-sentinel.com/business/fl-collections-bill-condocol-20120117,0,7471240.column

However, one Florida condo association treasurer feels differently. Robert Giacin told the _Sun Sentinel,_ ""Associations should be entitled to be reimbursed by banks for the reasonable time and fees that it takes to collect unpaid assessments.""