South Florida Paralegal Blog

Are you having problems with your Florida homeowner's or condo association? Is the sheer quantity and overbearing nature of the rules and restrictions making life in your community unbearable? Has your association filed a lien against you and threatening to foreclose on your home? Do you feel you have no voice in the decisions that affect your community? Have you been fined because you have 12 guppies in your fish tank and your association rules only permit a maximum of 10? Have your neighbors with too much time on their hands turned into informants, watching and waiting for you to break the smallest rule? Do you have to read a telephone-book size manual before using your pool or inviting a family member to spend the night at your home? Welcome to condo life in South Florida.

I often get calls from condo residents who relay horror stories to me about how miserable life in their community has become. I have heard stories about condo associations foreclosing over $200.00 in disputed assessments. I have heard stories of fist fights breaking out at monthly condo meetings. I have heard stories of people's tires being slashed over disagreements on rule changes. I have personally seen associations blatantly discriminate against prospective homebuyers based on the color of their skin or their ethnic background.

I don't mean to be too dramatic here, but in my humble opinion, condo communities have become little pockets in which basic American rights have ceased to exist.

Associations are governed by Florida Statutes, sections 718 and 720. However, upon reading the statutes, it appears that you can summarize your rights as a resident in one sentence: Associations can do almost anything they want as long as it is in the rules and regulations.

Condo communities in Florida are permitted to decide what type of vehicle its residents may own and what types of jobs they may hold. Believe it or not, many communities outlaw "work vehicles" or pickup trucks.

Imagine this scenario: An American serviceman spends the last three years risking his life to defend our nation. Upon his return, he gets a job working for an air conditioning company as an apprentice. The veteran's employer is nice enough to provide him with a company vehicle in which the employer's logo is displayed. The veteran doesn't make a lot of money, but his dream is to own his own home. He can't afford a single family home in South Florida, so he plans to use his VA benefit to buy an affordable condominium. He finds a nice community and enters into a contract to purchase a unit. His Realtor provides him with a telephone book sized Rules and Regulations and right there on page 743, it says that "commercial vehicles" are not allowed to be parked anywhere in the community overnight. Since he doesn't own a car yet and his only transportation is his employer's vehicle, he can't buy the condo.

Doesn't sound very American to me, but it could and does happen. When communities are permitted to prohibit pickup trucks and work vehicles, it's really a hidden message; we don't want any blue-collar people living here. In reality, it's socioeconomic discrimination and in Florida, it's legal.

I have two experiences living in communities with associations:

My first home was a townhouse in West Palm Beach and I enjoyed the community very much. The association maintained the property very well yet there weren't onerous and absurd rules that caused me live in a constant state of fear. My only interaction with the association was a friendly reminder that I needed to paint my front door. I had replaced the door a few months earlier and was simply procrastinating. No threatening letters or sneaky neighbors filing complaints. Just a simple, to-the-point reminder that I needed to paint. No big deal.

My second experience occurred a few years ago, in which I lived in an "all-age" condo community in the West Palm Beach area for a short time. I assumed that, like my townhouse experience, persons of all ages were supposed to live together in relative peace and harmony. And by relative peace and harmony, I mean that I would be able to enjoy a sunny, South Florida Sunday afternoon lounging by the pool without being accosted by fifteen elderly snowbirds. My offense? Bringing one bottle of water into the pool area.

Never in my life could I have imagined a Twilight Zone-type scenario in which a majority of residents would actually vote for a rule barring bottled water beside a pool, of all places. Of all the liquids that exist in our solar system that should be prohibited from a swimming pool area, water would be the last on my list of objectionable ones. Gasoline. Check. Battery acid. Check. Water left over from the processing of uranium. Check. But drinking water? You must be kidding!

But, it actually happened to me. I didn't even have time to put my towel down. Within seconds of unlocking the pool gate, a dozen shrieks of horror and anger broke the pleasant Sunday calm. "YOU CANT BRING WATER IN HERE!!!!!!" "I'M GOING TO TELL THE PRESIDENT". "YOU'RE BREAKING THE RULES!!!!!!!!!!!

I was in shock. It actually took my mind a few seconds to grasp what all the fuss was about. From the commotion these ladies of leisure were making, one would have thought I threw a dead rat in the pool.

It was at that moment I realized that I could never live in a condo community again.

So what's the moral of the story here?

First of all, the public (that means you) needs to put pressure on our lawmakers to change the statutes. Before living in a condo community, I thought the purpose of the association was to cut the lawn and make sure the sprinklers worked. I assumed the association's sole purpose was to maintain the appearance of the community, which in turn, maintains property values. I did not realize that many association boards had become pet projects for people with too much spare time to exercise control over every facet of life of the residents. Until lawmakers reign in the power of associations and restore them to the original purpose that they were intended, here are a few suggestions:

1. Understand that the tradeoff for living in a condo community is that you are surrendering basic rights that you have taken for granted most of your life.

2. Spend some time asking other residents questions about the community: Do you like living here? Are you happy with the association? Have you any had problems with the association? What would you change about the community? Have there been many special assessments? Seek out people in your age group as their concerns might mirror your own more accurately.

3. Pay especially close attention to rules regarding your ability to rent your unit if you have to move unexpectedly. Some communities actually have the gall to pass rules where the residents who owned before a certain date can rent out their units but newer owners are discriminated against and cannot.

4. Make sure you understand exactly what your condo fee includes. Some cover roof replacement, but some do not. Some include basic cable, some do not.

5. Take a good look at the pool area and the neighborhood in general. Are there any kids? No? If you're retired and want peace and quiet, this is a good thing. If you're not retired and the community, while billing itself as "all-age" looks more like a retirement community, realize that you're probably going to have a few challenges, to put it mildly.

6. If you're going to be a full-time resident, find out how many residents are "snowbirds". If it's a large percentage, realize that their priorities are different than yours. You may want the association to spend some some money to tear down the shuffleboard courts to build an exercise room but part-time residents may be happy to get their exercise from walking to the clubhouse each Tuesday to play Bingo.

AND MOST IMPORTANTLY:

7. Read the rules and regulations (yes, every darn page) before you decide to live there. If you don't understand certain parts, consult an attorney. It's better to spend a few hundred bucks before you buy than tens of thousands only to find out that you'll have to park your hated pickup truck three miles away.

If you can put up with the high property taxes, property insurance and the constant threat of annihilation by hurricane, living in South Florida can truly be a paradise. The key is to understand and accept the risks. At least we don't have to scrape snow off our windshields!

Lawmakers have been busy passing legislation to help homeowners at risk of losing their homes. First there was HOPE NOW, in which lenders, counselors and the government work with borrowers to help them keep their homes. While the White House says the plan will help 1.2 million homeowners, independent studies suggest it would actually help far fewer. Regardless, if you are having trouble paying your mortgage, it's a good starting point. You may also call HOPE NOW at 1-888-995-HOPE.

On December 20, 2007, the President signed into law The Mortgage Forgiveness Debt Relief Act of 2008. 

"Families dealing with the pain of a foreclosure should not have the double whammy of a large tax bill for terminating their mortgage through no fault of their own," said Ways and Means Committee Chairman Charles B. Rangel. "I am pleased the Committee joined together to unanimously pass this critical legislation and I look forward to bringing this measure before the full House."

What Chairman Rangel really should have said was "it is absolutely absurd that IRS rules previously allowed a homeowner who lost their home to be hit with a tax bill in the first place. It is the perverted thinking of Washington that someone who loses their home has somehow received income." Of course, he wouldn't ever say that, but he should have.

And finally, a house panel narrowly approved a measure that would allow bankruptcy judges to lower the balance a borrower owes on their home as well as change the interest rate and other terms. Backers argue that it is needed to help people stay in their homes. Those against it (including lenders.... surprise!) argue that bankruptcy judges have no business getting involved in a contract between a lender and a borrower. They argue that it isn't government's job to bail out people who made bad financial decisions.

I usually agree that government shouldn't bail out people who were greedy,  made poor investment decisions or just didn't read their loan documents, but in this case, drastic measures are needed. The effect of the housing and mortgage crisis is trickling down to every sector of the economy and we face the real risk of a serious recession. That's bad news for everyone, lenders included.

Additionally, this administration hasn't been very, how should I say, "consumer friendly" in the past seven years. The "hands-off, low-tax, let-the-market-fix-itself" approach hasn't seemed to do much for reigning in gas and food prices, boosting worker's wages and making health insurance more affordable.

Maybe having government stick their nose into the economy a little more can help some people. We'll have to wait and see.

Would somebody please tell me why Bill Gates is the richest man in the world? Yes, I know, his garbage operating system is on almost every computer in the world. But at this point, a few decades after he ripped off the Mac user interface (who ripped it off from Xerox), shouldn't my computer be able to actually work? Like, all the time. Heck, I'd settle for most of the time.

I consider myself an experienced computer user, bordering on geek status. I can set up a network, edit the registry and there are very few things I can't figure out within a few seconds. So it is especially frustrating to me during the past month when my computer continually locks while I am connected to the internet. Why is my operating system having a party behind my back and corrupting files when I have made no changes?   

I keep my computer automatically updated with Windows updates. I have run virus scans using multiple programs and spyware scans with four separate programs to no avail. I have googled the issue and can't seem to find a solid fix.

So here I sit dreading the possibility of having to spend an entire weekend wiping my drive and starting from scratch. How many wasted hours have we all spent going through this ritual? After almost twenty years, shouldn't Windows Operating System do the one thing it's designed to do.... operate my computer system?

A while ago, I heard a quote by the head of one of the big computer companies, a competitor to Microsoft, I don't remember who it was or the exact quote, but he said something to the effect of "computers need to evolve into appliances that work reliably and the end user shouldn't need a degree to operate it". I second that!

How many years has USB been around? Why do I still need to click in the tray and ask permission to remove a USB device? Why can't I just yank the thing out without getting a stern warning? Why must we restart our computer after installing new programs or many Windows updates? To the eggheads who developed Microsoft Outlook, please explain to me why there isn't a one-click solution to back up all my mail settings, folder settings, contacts and messages?

Instead of designing an operating system that tries to do everything for everyone, how about you Microsoft guys work on a product that doesn't require me to spend a weekend removing it and reinstalling it once a year? I just want my computer to be an appliance. Preferably, like a toaster that plays MP3s.

Recently, in a response to a posting about credit card company practices being examined by Congress, a reader posted a comment regarding bankruptcy. While "cadillacjoe" often makes some solid, well-thought-out points, I have to disagree with a few comments he made.

I think I have a pretty good idea of the consequences of filing bankruptcy. First of all, I have typed approximately 5,000 Chapter 7 cases between 1994 and 2007. I have spoken to thousands of my clients who have called me months after their discharge, happy to report that they had new credit and even some car loans and mortgages with decent interest rates.

Secondly, I have personal experience with this issue, as I was forced into filing bankruptcy almost a decade ago after my ex-wife lost the home and vehicle I purchased for her while we were married. The fact that her ex-husband didn't pay a dime of child support for their four kids didn't help either.

Third, as a mortgage broker, I can personally attest that I have helped several post-bankruptcy clients obtain loans at decent rates (approximately 1 - 1.5% over what somebody with good credit would pay) in as little as seven months after bankruptcy.

Joe states: "I don't think the housing market in Palm Beach County really has anything to do with going bankrupt or the amount of people that are going into bankruptcy"

Joe, I have to disagree. Why? Because I am averaging 15-20 calls a week from people who are filing bankruptcy precisely due to the housing market. The stories are similar but it all boils down to a few scenarios:

1. The client purchased investment property at the point when prices were sky high, just before the market crashed. They are holding a property that is worth $50,000 to $100,000 less than they paid a year ago. They can't sell it, can't rent it. What are their choices? If they do a short sale or deed in lieu, they will be taxed on the deficiency balance, as the IRS considers this forgiven debt as income. Jonathan Alper, Esq. explains on his great Florida Asset Protection Blog.

2. The client purchased or refinanced their primary residence with some type of adjustable loan and now the payments have jumped $200 - $300 per month. Coupled with the fact their home is worth less than they owe, they don't have many options either.

Joe goes on, stating "Bankruptcy will often remain on your credit report for as long as 10 years. During this time it can be next to impossible to obtain loans or any type of credit."

Joe is right, a Chapter 7 stays on your credit for exactly ten years, but speaking from personal experience, it doesn't prohibit your ability to get credit. I had three new credit card accounts within six months after my bankruptcy discharge. In my experience and those reported by my clients, bankruptcy will generally not affect your ability to get credit, but it will affect your interest rates for approximately 18-24 months.

Unfortunately, Joe has fallen victim to the inaccurate news reporting on the changes in the bankruptcy law when he asserts "Also in 2005 a new federal bankruptcy law went into effect making it much more difficult to erase credit card debt by filing for bankruptcy."

In reality, the 2005 changes had nothing to do with one's ability to discharge credit card debts in bankruptcy. It's amazing how many people say this to me. The 2005 changes had more to do with the fact that the credit card companies bought and paid for this law. Their multi-year campaign to "reform the bankruptcy laws" was vetoed several times by President Clinton. The credit card companies (after making billions of dollars on ridiculously high interest rates and bogus fees) were whining that it was too easy to file bankruptcy and that a large number of bankruptcy filers actually had the ability to pay some of their debt.

Guess what? A recent study confirmed what I already knew; the majority of bankrupts do not have the ability to pay even a portion of their debts, after taking into account their regular living expenses. In fact, this study revealed that over 97% of people who qualified under the old rules still qualify under the reforms.

Finally, Joe states "Before you restrict yourself to bankruptcy you should explore other options. Quite often, lawyers/ paralegals are quick to suggest bankruptcy and they don't always explain how damaging bankruptcy can be. Why would they do this? The answer is simple; if you don't file for bankruptcy, they don't get paid. Another opinion would be a Debt Settlement program. However if a bankruptcy is unavoidable I would find a licensed bankruptcy attorney one who specializes in Chapter 7 and Chapter 13 cases."

I agree with Joe that bankruptcy should be a last resort and that people should explore other options first. That is why I have always encouraged people to do so, even before pre-bankruptcy credit counseling became a requirement. However, there are many "credit counseling" companies out there who don't deliver on their promises and some are downright crooks. If you are interested, I would encourage you to check out the originator of the entire credit counseling concept, Consumer Credit Counseling Services. They are a United Way agency and they don't play games.

Regarding Debt Settlement, I'm not a big fan of the concept. Here's how it works: you pay every month into an account and when you reach, say 25% of your total debt, the Debt Settlement company will supposedly negotiate with all your creditors to accept less than you owe. I'm not a big fan after seeing many of these companies in action. Many charge huge fees, up front, so if you change your mind after a few months, they keep your money, sometimes thousands of dollars. Secondly, many promise to stop collection calls, but they simply can not. There is no law that says creditors can't harass or even sue you while you are paying thousands of dollars to these companies over a 3-5 year period. Third, your credit is ruined by the time the company actually settles the debt, if you actually complete the plan. Guess what? You could have filed bankruptcy and have been completely re-established in less time.

And lastly, not all attorneys or non-attorneys are more interested in making a quick buck than doing the right thing. I have talked more people out of refinancing during the boom than I have brokered loans for. Why? Because I didn't think it was in my client's best interest. Sure, my bottom line was lower, but I'm in this for the long haul. I'm proud to say that my company has never received one complaint in 14 years of business. I'm proud to say that over 85% of my clients were referred by a previous client.

Bankruptcy should never be anyone's first resort. Those experiencing financial difficulty should always explore other options first. But if you find yourself having to file bankruptcy, at least get accurate information from people who have been through it. It will hurt you in the short term, but you will see, life goes on.

Judging by the volume of calls I've been receiving in the last few weeks, we're only just beginning to see the tip of the iceberg in the foreclosure crisis in South Florida. Mark my words.... it's going to be really ugly. The politicians are already Monday morning quarterbacking, scrambling to hold hearings in order to find out "what went wrong" with the mortgage industry and the housing market. What went wrong is the usual culprits; greed, stupidity and laziness.

Last year, if you came to me and said "Dave, I want to buy a house. I have mediocre credit, I can't prove my income and I have no money to put down or even cover my closing costs", I could get you a loan. Not anymore... those days are long gone.

Why? Because the banks are finally waking up and saying "um, maybe we shouldn't have been throwing money around so easily. Maybe the eggheads in accounting should have anticipated that if people borrow 100% of the value of their house and their house value goes down, maybe they won't be so anxious to send that mortgage payment every month!"

But there's plenty of blame to go around. Mortgage brokers and borrowers themselves have to take their lumps too.

The American public has been brainwashed into thinking that everyone should own a home. It's the centerpiece of the American Dream, after all. And generally speaking, owning a home is a great thing. 

But now we live in the "buy-now-pay-later" world. How many of us have been lured by those furniture companies inviting us to come on down, pick out that shiny, new, black pleather sectional with recliners, cup holders and built-in storage for a case of beer and pay later..... as in real later..... like your kids are going to be paying for it later.

So if you have bad credit, you owe a lot of money to credit card companies, you can't save a penny, perhaps, just perhaps you should continue renting a little longer to get your financial life on track? That's how my grandparent's generation thought. I remember hearing about my grandparents buying their first home. Guess what they did? They saved money for a downpayment. My parents did too. Back then, mortgage companies required it.

In the last few years in South Florida, we experienced a housing market hotter than anything since they gave away land in the 1800s. People saw their neighbors buying homes and selling them for huge profits just a few weeks or months later. Everybody wanted a piece of this money pie! And while real estate investing is an important part of a balanced investment portfolio, amateur investors didn't understand the cyclical nature of the market as well as good 'ole supply and demand.

And now that the bubble has burst and the professional investors have walked away with their profits only to move on to other areas, thousands and thousands are stuck with homes they can't pay for or sell. In some areas, there are more "For Sale" signs than cars in driveways.

I'm receiving calls from people who speak like professional investors; "yea, I bought five properties and now the market has taken a turn and I need to get out from under them". And after speaking to them for a few minutes, I learn that these are postal workers, single moms with kids, teachers and firemen. They're not investors who have been doing this for years. And that's the sad part.

So the calls for bankruptcy will continue coming in to my office and home prices will continue to slide for another year to year and a half until all the inventory is gone. Things will eventually stabilize and then we will see normal appreciation again.

My best advice; if you have credit issues, work on cleaning them up. Start saving some money for closing costs and at least a 5% downpayment. Buyers looking to get into a nice home to live in will be able to find some great deals! Just forget about "flipping" and making $50,000 in a few months. 'Aint gonna happen!

Last week, a woman called me in tears, explaining that she was being harassed nonstop by a collection agency named Financial Credit Services. They were calling her over twenty times a day and threatening to put a lien on her home. I learned that she was a widow in her sixties, has multiple sclerosis and diabetes and cares for her handicapped brother who lives with her.

When she asked "Mr Ball" (an alias name) what this debt was, he snapped that it was for a credit card from 1989. 1989? Are you kidding me? If this debt was hers, it certainly couldn't be enforced 18 years later. Click here to see a state-by-state list of the limitations on enforcing debts. Furthermore, he refused to be more specific, so how could this woman even know if the debt was hers?    

She became so frightened, she allowed this lowlife to withdraw $600.00 from her checking account, which he wasted no time doing. However, this thief took it upon himself to attempt to steal another $5,500.00 from the same account, which luckily, bounced. In Florida, most people aren't aware that trying to steal money from a senior citizen is a felony. Additionally, "Mr. Ball" broke numerous federal laws regarding collections (FDCPA), by calling over 20 times in one day, refusing to follow up his first phone contact with a letter and by calling her neighbors (can you believe it?) in order to pressure her to call them back. Disgusting! How does this person sleep at night? And why is he not in jail?

I am not a lawyer and I am unable to "go after" this company for her, but I did some research at the hands-down best site on educating the public about collection issues, budhibbs.com. After a few moments, I learned that Financial Credit Services was already in hot water with the State Attorney in Illinois, their home state. We filled out one of their complaint forms and submitted it. I also emailed Mr. Hibbs, seeking his recommendation and he emailed me back the same day with a copy of a letter to fax to the crooks immediately.

This kinda of stuff drives me absolutely nuts! I am so sick and tired of seeing seniors and the poor screwed over by those who have no moral problem with lying, cheating and stealing. It is so important that we, the public, learn our rights and refuse to be abused any longer.

I strongly encourage everyone who is facing harassment by creditors to spend some time at Mr. Hibbs web site!

A few weeks ago, I was mesmerized watching CSpan as the head honchos of three of the largest credit card companies explained to Congress how wonderful they are. As Senators read horrible tales of how their constituents had been abused by credit card companies, the three multimillionaire CEOs squirmed and shifted in their seats.

As someone who deals with people going through difficult financial situations, I wanted to stand up and cheer. About time Congress got involved in the credit card mess. Unfortunately, some of the worst offenders didn't send their representatives to the hearings.

Generally speaking, I like to see as little government regulation in business transactions, but this is an area where some real reform is needed. These companies are literally out of control. Here's an example of a stunt that Capital One pulled on me:

As anyone who pays their bills online knows, you must select the closest business day before the payment due date if it falls on a weekend. A few months ago, I set up my online payment almost three weeks in advance and selected Friday, the day before my payment was actually due.

When my next month's statement arrived, I was surprised to see a hefty late fee. Before calling Capital One, I checked my bank account online to verify that it had in fact been paid on the Friday I selected; it had. I called Capital One and was informed that they since did not receive my payment until after 3:00 on that Friday, it was not credited to my account until the next business day. I was flabbergasted! That is perhaps the most creative way to basically steal money from customers I have ever seen! They had my money one day early yet I was charged a late fee. Only credit card companies can get away with unethical, dirty, sneaky tactics like this!  

We as consumers need to stop complaining and do something. Write to your elected officials and let them know you've had enough already!

Since 1994, I have worked as a South Florida Paralegal. Since I was a child, I have always been fascinated by the law. However, I never planned on a career in a law-related field. In fact, I graduated with a B.A. degree in music, my first love. I have played guitar (self-taught) since age 13 yet never planned on that providing a career either.

After one year in Palm Beach Community College majoring in economics, I decided that being a financial consultant would allow me to have a comfortable living, but my true love was music. With the encouragement of an always-supportive Mom, I took the plunge. As a single mom, she never had the luxury of "pursuing her dreams". She was too busy trying to put food on the table and deal with a guitar-playing rebellious teen. But when I sheepishly asked her opinion on switching my major to music, she said without hesitation "go for it!".

After four years of music theory, sight-singing classes, piano lessons, arranging classes, classical and jazz guitar lessons, I was armed with a degree that qualified me to.... to do what? I wasn't sure.

I was playing four nights a week in a successful local band but had no idea what I was going to do when I "grew up". If I was going to teach music and earn a steady paycheck, I knew I would need at least a Masters Degree and probably a P.H.D. The thought of five more years of school wasn't too appetizing at this point.

Luckily, fate interceded in the form of an acquaintance who owned a local paralegal company. She worked directly with the public and typed legal forms for bankruptcy, divorce, corporations and other legal forms. We talked for a bit and she asked me "what do you know about bankruptcy?". "Um, absolutely nothing", I replied. "You're hired". And the rest is history.

In 2000, when this acquaintance (eventually a friend and employer of six years) decided to move in a different career direction, she offered me the opportunity to buy the company. Sounds like that razor company guy, doesn't it?..... "I liked the company so much, I bought it".

So here I am, typing legal forms instead of playing on a stage in smoky clubs. Sure, I've been in a few bands over the years and music will always remain my first love. But helping people in trouble is a very close second. Besides, lugging amplifiers up and down stairs isn't that fun anyway.

When I moved last year, I was organizing some of the relics of my childhood.... second grade report cards, high school year book, etc. I stumbled upon one of those "aptitude" tests from junior high school that was supposed to predict my career path in life. You know the tests I'm referring to.... hundreds of strange questions penciled in the circle with a #2 pencil and some all-seeing, all-knowing computer would spit out my destiny. I don't know why I saved this unexceptional example of educational crystal-ballery, but my eyes were drawn to its' conclusions.

First career choice - Entertainment
Second career choice - Law

(Insert Twilight Zone theme here)