Florida statutes limit what banks owe in unpaid assessments to condominium and homeowners associations after taking title to a unit or home via foreclosure. A new bill advanced by state lawmakers reiterates this principle, but critics say it further protects banks from the real costs of foreclosures.
House Bill 319 breezed through a House of Representatives vote last week — 114 to 1. The legislation makes clear banks will not owe foreclosure fees beyond their state-sanctioned share of unpaid assessments, shielding them from late fees, interest and bills from attorneys and debt collectors hired by boards to collect unpaid dues from deadbeat owners.
The overwhelming margin of votes in the House doesn't end the debate, an interesting one given public suspicion and skepticism about banks in general.
Proponents say HB 319 clarifies existing statutes. Critics call it expansion of provisions protecting banks at the expense of Florida owners.
Alex Moskovitz, chief financial officer of Association Financial Services, which offers debt collection services to shared communities in South and Central Florida and statewide, says it gives banks even more protection.
"It is a shift of economic loss away from the bank to associations which hire law and collections firms," Moskovitz said. "It expands amounts banks are protected from paying and is not reflective of the total amount due from a bank" following foreclosure.
Supporters counter HB 319 ensures banks know the extent of their liability before making a home loan, as intended when lawmakers passed so-called Safe Harbor limits back in 1992.
Those "safe harbors" limit what banks owe associations in unpaid assessments to 12 months of unpaid maintenance fees or 1 percent of the original mortgage, whichever is less.
"Those opposed to HB 319 are wrong in their interpretation of current law," said Yeline Goin, executive director of the Community Association Leadership Lobby. "If the statute is interpreted to mean that banks also have to pay interest, late fees and attorneys' fees, then the safe harbor amount is no longer limited and predictable because these additional amounts are unknown and can vary from case to case."
Who knows whether HB 319 becomes law? A version must pass the Senate, and that companion bill SB 680 does not yet contain Safe Harbor provisions.
Whichever side you are on, you still have a chance to contact lawmakers about SB 680: