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Half of Florida Home Owners May See Jump in Cost of Home Ownership

Decision by the Florida Bar to require the use of attorneys instead of management companies may cause a significant increases to Homeowners Association Dues.

 
PRLog - June 20, 2012 - TAMPA, Fla. -- Tampa, FL (June 19th, 2011) The Florida Bar meets on Friday to decide on an issue that could drive up condo and home owner’s association fees by at least 20% for thousands of home owner’s across the state.

At issue is what the Florida Bar considers to be the unauthorized practice of law by Community Association Managers (CAMs) – companies charged with administering the management of community associations.

The Bar’s position is that many of the duties presently carried out by CAMs are legal in nature and should only be executed by licensed Attorneys. But industry insiders see the move as a protectionist measure designed to eliminate competition from Association Management firms that could have the immediate effect of slowing a tenuously-recovering housing market.

The Florida Bars’ Real Property Probate and Trust Law Section committee claims that what they’re seeking is in the interest of public safety – that the public is being harmed by non-attorneys handling the complexities of association management.

But industry trade groups strongly disagree. The executive director of the state’s largest community management advocacy group – CEOMC, Brad van Rooyen, remarked that management companies provide necessary administrative services to Associations at a fraction of the price that would be charged by law firms. “Associations will be forced to raises dues by 20% or more to account for increased attorney’s fees, if this position is enforced” commented van Rooyen.

Nearly fifty-percent of Florida Homeowners live in an HOA or condo association, many of which are struggling financially due to foreclosures, declines in home values, and the inability of owners to pay their dues.  “There’s already an increased strain on Associations from delinquencies” commented van Rooyen. “Associations will be even harder hit the default than they already are if they have to increase dues on owners who are already struggling to keep up.”

Antonio Santoyo, a member of the board of directors for the Hemingway Estates Homeowners’ Association, commented “We’ve had increases in our HOA dues over the last couple years. As more people are unable to pay their dues, the rest of us have to keep up the difference. If we are forced to start using attorney’s for more and more services, I’d hate to think what our dues will be next year.”

Unfortunately for homeowners as HOA dues rise, property values can sometimes go down. According to Peter Murphy, partner at Tampa-based Home Encounter, this situation has the potential to slow down a housing recovery that has been gaining steam over the last few months. . “Home buyers take into account the total cost of ownership, and association fees have the potential to substantially add to the cost of owning a home. The communities that can least afford to alienate home buyers by increasing their dues will be the ones that are impacted by this decision. It will be harder than ever for first time home buyers to purchase a home if association fees continue to rise. Demand will slip, and values could fall.”

van Rooyen is also concerned that the decision by the Board could create a downward spiral effect on dues and home values. “As dues rise, more homeowners find they can no longer pay their association fees. This raises dues even further on community members which increases the risk of wide-spread default.” “The result of this is more homeowners will find themselves receiving letters from attorneys the associations hire to collect their dues, further raising legal cost. Dues must then go up even more to cover this. The whole process feeds on itself.”

The CEOMC believes that the Florida Legislature’s intent was to keep association costs low by not requiring attorneys to perform the mostly administrative functions of association managers.”The legislature did not intend for associations to have to hire an attorney to conduct mundane matters of business, and to do so is not only overkill, but an unnecessary cost burden on cash-strapped associations” commented van Rooyen.
“In our opinion, this is more about protecting their business than protecting public interest” commented van Rooyen. The interest of the public has been preserved and protected by the role of CAMs in community management.” On Friday, we will see if the Florida Bar agrees.

***

The Florida Bar’s Committee on the Unlicensed Practice of Law meets Friday June 22nd at the Gaylor Palms Resort & Convention Center. Comments may be submitted to Jeffery T Picker, Assistant UPL Counsel, The Florida Bar, 651 E. Jefferson St. Tallahassee, FL
32399-2300.

***

About Brad van Rooyen

Brad van Rooyen is the executive director of the CEOMC, the Chief Executive Officers of Management Companies, group, a community association advocacy organization.  Brad is also a partner of Home Encounter, a full service real estate firm that handles community management, property management, sale, investments, consulting, and analytics. He may be reached at 813-600-5090 x106.

About Peter Murphy

Peter Murphy is the Chief Executive Officer and partner of Home Encounter, a full service real estate firm that handles community management, property management, sale, investments, consulting, and analytics. He may be reached at  813-600-5090 x101.

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Source:Home Encounter
Location:Tampa - Florida - United States
Industry:Real Estate, Legal
Tags:hoa, homeowners association, home values
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