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Did you know that in some states, your HOA legally collects rent from YOUR tenant?

By Deborah Goonan

Roberts Rules of Order

If you are in a HOA and you need to know more about Robert's Rules of Order, click here. There is a chapter in the book just for HOA's.

It may sound unbelievable, but it’s true. In Florida, where I currently live, if an owner of a condo or HOA home is delinquent in funds owed to the Association, the HOA’s attorney can send a letter to your tenant and demand that the rent payments be sent directly to the Association, to offset your debt.

See below this blog for a copy of the Florida Statute 718 provisions, governing condominiums. Statute 720, which governs Florida HOAs, has an almost identical provision.

Basically, condo associations in Florida are collecting rent from tenants to get back at the owner-landlord. This happens in other states as well. They have essentially copied Florida’s “success” in collecting money from owners.

The HOA Attorney reasoning for collecting rent from your tenant - because it works.

Well, so would sending a Mafia thug to smash your kneecaps with a baseball bat and threaten to harm your loved ones. That doesn't make it right.

The challenges of being a landlord

Imagine you own a townhouse in Florida. This is your second home, and you use it for vacation, but lease it to tenants most of the year. The rent collected by the tenants offsets most if not all of your operating costs – the mortgage, taxes, insurance, HOA fees, and the like. You pay your HOA dues on time, arrange to have the property monitored and maintained as needed. Your tenants are prescreened, and they pay their rent on time. All is well with the world.

But sometimes circumstances change. Suppose your tenant falls behind on the rent, due to a job loss? Or what if your tenant becomes a problem and you have to go through the eviction process, which can take months? In the meantime, they are not paying the rent.

Or maybe all is well with your tenant, but you have just learned that you will be laid off from your job. Maybe you or a family member becomes seriously ill, and the health care costs pile up and you have to stop working. Now you need the income from your tenant even more than ever.

Or what if you are one of the millions of owners that is still upside down on your mortgage, and leasing the property is the only practical alternative while you wait out the housing market?

HOA corporate rights trump private property rights

Any of these circumstances might lead even a well-intentioned owner-landlord to fall behind on assessment payments, especially if the HOA issues a sudden and unexpected Special Assessment.

If you are unable to pay the balance in full by the due date, in addition to the assessments, you will probably be charged late fees, interest, and collection costs.

Now, instead of arranging a payment plan with you, the HOA might simply order your tenant to send the rent checks to them instead of you! Isn’t this exactly the last thing you need, at the worst possible time?

Think about the awkward and potentially harmful situation this creates for the tenant, who becomes a pawn in a battle he did not create. What conscientious tenant wants to alienate the landlord by diverting the rent to a third party? At the same time, if the tenant does not pay the HOA, the HOA can evict YOUR tenant! The HOA may get their money in the short run, but what if your tenant decides to break the lease and leave without paying? It happens fairly often.

Outraged yet? Read on.

Ripe for Abuse?

As we know, HOAs are infamous for issuing fines for various violations. And quite often those alleged violations are minor. As a long-distance landlord, you might not even be able to verify the existence of a violation, let alone immediately address it. You might just happen to disagree on the grounds for the fine.

As with delinquent assessments, if you don’t pay the fine immediately, you rack up late fees, collection costs, and attorney fees.

In Florida, the HOA can likewise order the diversion of your tenant’s rent payments to them instead of you.

What does this say about property rights for owners, when the HOA can potentially create bogus fines and then collect them from your tenant? Sound like extortion?

Tenants have few rights in HOAs

By the way, apparently the Association can also remove the right of your tenant to use amenities such as the pool or fitness center, simply because you, the owner, are in arrears or have violated a rule. This has been a hot topic of discussion on more than one HOA forum.

Florida law sanctions the unequal rights of tenants, who now not only have to abide by all of the same covenants and rules as owners, but are also expected to pay the HOA directly if their landlord purportedly owes the HOA money. Yet tenants have NO voting rights (in 99% of Associations) and may even be turned away from attending meetings.

What happened to Equal Protection under the 14th Amendment?

I have owned several homes that were not subject to HOA covenants and restrictions. Unfortunately, when we relocated to Florida from another state several years ago, we were left with a house that we couldn’t sell. No one was even looking at houses, let alone buying them. There was a shortage of homes for rent at the time, so we decided to take on the responsibility of tenants. That helped cover some of our costs, and removed the worry that we’d end up with frozen pipes or squatters living in our house.

I cannot imagine what we would have done if some HOA had prohibited us from leasing our home, due to rental restrictions (very common in HOAs across the country).

Because we had tenants, we were able to keep up with our property tax payments. But when an owner does fall behind on property tax payments, the County cannot order your tenant to send rent to the tax office! (They file a lien and collect on it separately or when you sell your home.) And if you still live in the county, you don’t lose your voting rights at the polls due to a tax lien. The HOA often removes your voting rights for not being “a member in good standing.”

Think about this: do we bar the tenant's children from using the public playground or pool down the street because their landlord is delinquent on property taxes? Do we forbid tenants from attending City or County meetings, or from voting at the polls, simply because they do not own property?

Of course not.

So why do we allow this kind of outrageous and unjust collection and enforcement activity, and corporate abuse of our rights, in our private Associations?

Here is Florida Statute 718:

If the unit is occupied by a tenant and the unit owner is delinquent in paying any monetary obligation due to the association, the association may make a written demand that the tenant pay to the association the subsequent rental payments and continue to make such payments until all monetary obligations of the unit owner related to the unit have been paid in full to the association. The tenant must pay the monetary obligations to the association until the association releases the tenant or the tenant discontinues tenancy in the unit.

1. The association must provide the tenant a notice, by hand delivery or United States mail, in substantially the following form:

Pursuant to section 718.116(11), Florida Statutes, the association demands that you pay your rent directly to the condominium association and continue doing so until the association notifies you otherwise.

Payment due the condominium association may be in the same form as you paid your landlord and must be sent by United States mail or hand delivery to   (full address)  , payable to   (name)  .

Your obligation to pay your rent to the association begins immediately, unless you have already paid rent to your landlord for the current period before receiving this notice. In that case, you must provide the association written proof of your payment within 14 days after receiving this notice and your obligation to pay rent to the association would then begin with the next rental period.

Pursuant to section 718.116(11), Florida Statutes, your payment of rent to the association gives you complete immunity from any claim for the rent by your landlord for all amounts timely paid to the association.

2. The association must mail written notice to the unit owner of the association’s demand that the tenant make payments to the association.

3. The association shall, upon request, provide the tenant with written receipts for payments made.

4. A tenant is immune from any claim by the landlord or unit owner related to the rent timely paid to the association after the association has made written demand.

(b) If the tenant paid rent to the landlord or unit owner for a given rental period before receiving the demand from the association and provides written evidence to the association of having paid the rent within 14 days after receiving the demand, the tenant shall begin making rental payments to the association for the following rental period and shall continue making rental payments to the association to be credited against the monetary obligations of the unit owner until the association releases the tenant or the tenant discontinues tenancy in the unit.

(c) The liability of the tenant may not exceed the amount due from the tenant to the tenant’s landlord. The tenant’s landlord shall provide the tenant a credit against rents due to the landlord in the amount of moneys paid to the association.

(d) The association may issue notice under s. 83.56 and sue for eviction under ss. 83.59-83.625 as if the association were a landlord under part II of chapter 83 if the tenant fails to pay a required payment to the association after written demand has been made to the tenant. However, the association is not otherwise considered a landlord under chapter 83 and specifically has no obligations under s. 83.51.

(e) The tenant does not, by virtue of payment of monetary obligations to the association, have any of the rights of a unit owner to vote in any election or to examine the books and records of the association.

(f) A court may supersede the effect of this subsection by appointing a receiver