Soft Power—Hard Power

By Betsy Barbieux, CAM, CFCAM, CMCA / Published February 2023

The statutes for our Florida community associations make the association through its board of directors responsible for the protection of the property and its value, the maintenance of the common areas and elements, and the enforcement of the restrictions on owners’ use rights.

     With that comes the obligation of the owners to pay their share of whatever it takes to operate and maintain the association. Essentially, owners have signed a blank check when they close on the purchase of their unit, share, or lot.

     Through lack of knowledge, inadequate communication of owners’ rights and responsibilities, financial hard times, or just plain willful disregard for the contractual relationship with the association and other owners, some owners fail to pay their share of the expenses.

     Some communities have well-defined collection policies that educate owners on their financial obligations and consequences of not meeting those obligations. These policies guide the board and manager in the equitable application of them. Boards of directors that do not have established collection policies could give the appearance of being inconsistent, arbitrary, and selective. 

     Collection policies would outline payment deadlines, late fees and interest charges, the number of warning letters, and the authority to refer to legal counsel for collection and lien foreclosures. Managers should be able to follow those policies without having to go back and forth with the board about the who and what and when to refer.

     Once referred to legal counsel, any communication from that owner should be referred to the attorney. The manager and/or board members should not engage in any conversation or negotiations with that owner. Any payments made by the delinquent owner should be sent to the attorney.

     Should the owner refuse to bring his account current, the attorney will proceed to foreclose the association’s lien on the unit, share, or lot. Once the foreclosure proceeding is completed, the association will be the likely person/entity to take possession of that home. If the home is vacant, the association may engage the services of a realtor to handle either the rental or sale of the home or may have the court appoint a receiver to collect the rents. If the home is occupied, the association may collect rent from the owner who is now a tenant. Should the owner/tenant not pay, the association may use the eviction statutes to remove the owner/tenant. 

     In a cooperative, the association may terminate the proprietary lease by using the default clause and have the owner evicted from the home.

     Any of these processes is using the statutory and documentary “hard power” given to the association. These processes cost money and take time and usually end with everyone having a bad taste in their mouths. The association does not always recoup its attorney fees.

     Thankfully, the statutes give the association several “soft power” processes that don’t cost as much as the “hard power” processes and may still achieve the desired effect.

     The association has statutory power to fine owners for violations of the documents or suspend the owner’s or their tenant’s use rights of the amenities and common areas. Suspensions of the use rights will depend on whether the association has any amenities and whether the entry to those amenities and common areas is electronic. If the association is still using a metal key, limiting entry is impractical. 

     The fining process requires coordination with management, the board of directors, and a fine/appeals committee. Those steps are as follows:

1. The board adopts a written violation policy (including how many letters, warnings, drop dead date for compliance).
2. The noncompliant owner issue is placed on the next board meeting agenda.
3. If the owner has been non-compliant for 10-plus days, the fine per violation is now $1,000 and/or suspension of common area use.
4. At a regularly posted board meeting, the agenda item of the noncompliant owner is discussed and a fine and/or suspension imposed.
5. The owner is given at least a 14-day invitation to appeal the fine/suspension issued by the board.
6. The fine/appeals committee must be three owners not related to any board member.
7. The sole role of the fine/appeals committee is to affirm or reject the fine or suspension.
8. If the fine/appeals committee agrees by majority vote, the fine/suspension is imposed.
9. If it is a fine, the owner has five days to pay after receiving notification of the committee’s decision.

     Before you start number one, if you don’t have the fine/appeals committee (step six) in place that is willing to meet after the board gives a 14-day invitation to the noncompliant owner, you can’t fine or suspend the use rights of the amenities.

     In the event of monetary delinquencies of more than 90 days, the association has statutory power to suspend the voting rights of the owner and (again) to suspend the owner’s or tenant’s use rights of the amenities and common areas. In a condominium association, the fine must be more than $1,000.

     In the event a delinquent owner has a tenant occupying his home, the association also has the statutory power to intercept the rent being paid by the tenant to the owner. There is a statutory letter to be sent to the tenant (or property manager of the owner) directing the tenant to pay the rent to the association until the tenant is told to stop. In the meantime, the tenant is not considered delinquent and cannot be evicted by the owner. How-ever, if the tenant fails to pay, the association can evict the tenant. It is important to remember that you cannot reveal to the tenant or any other third party the amount of the delinquency. Doing so may violate the Fair Debt Collection Practices Act.

     Perhaps the difference between choosing to use “soft power” or “hard power” is communication with understanding. Owners have the responsibility to pay whatever their share is to cover all the expenses of the association maintenance and operations. It is difficult and sometimes unpleasant to remind owners they have basically signed a blank check to the association when they make their purchase. They have agreed to pay “whatever it takes.”

Betsy Barbieux, CAM, CFCAM, CMCA

Florida CAM Schools

     Betsy Barbieux, CAM, CFCAM, CMCA, guides managers, board members, and service providers in handling daily operations of their communities while dealing with different communication styles, difficult personalities, and conflict. Effective communication and efficient management are her goals. Since 1999, Betsy has educated thousands of managers, directors, and service providers. She is your trainer for life! Betsy is the author of Boardmanship, a columnist in the Florida Community Association Journal, and a former member of the Regulatory Council for Community Association Managers. Subscribe to CAM Matters^TM at www.youtube.com/c/cammatters. For more information, contact Betsy@FloridaCAMSchools.com, call (352) 326-8365, or visit www.FloridaCAMSchools.com.