Estoppel me if you’ve heard this one before

So a man walks into a bar.

No, hold it … it’s a man and a woman … and it’s not a bar, but a real estate closing. And there is this homeowners association and an owner who hasn’t paid his bills … or was it his maintenance fees?  Anyway …

The truth is I’ve never been all that good at telling jokes, especially those tired yarns involving complex real estate transactions.

If you are among the millions of Floridians who are now or someday will be part of a homeowners’ association — READ THIS VERY CAREFULLY — because CS/SB 736 and HB 611 have your name written all over them.

James Rosica of The Tampa Tribune, along with our Christine Sexton, was among the first to pick up on the punch line when last month he wrote, “Change to obscure real estate law could cost homeowners.”

Understatement alert!

Here’s an example of how these bills will stick to it condo owners: When some deadbeat decides to stop paying homeowners fees, he or she accrues fines and other debts. That outstanding debt travels with the property and must be settled at closing. And under these bills it still will.

Except — you knew there would be an “except” — these legislative proposals severely shift the burden to the HOA, making the association have to more quickly prepare the necessary documents (a.k.a. “estoppel certificates”) and get them to the title company.

That wouldn’t be that big of a deal except (there we go again) the bill also caps the fees that can be charged for processing the docs (no matter the actual cost involved).  And if that doesn’t make this a full-on knee-slapper, the company requesting the documents can take its own sweet time paying the tab for the service. Yes, everyone involved in the closing (from the appraiser to the title company) gets paid when they perform their particular service — at or before the closing. The HOAs, though,  are being singled out. Not only do they have to wait to collect their fees after the fact, if the closing doesn’t occur in a timely manner, they will be forced to wait even longer to be paid and may be required to go to court to collect. (Good luck with that.)

Plus if the HOA (a.k.a. the homeowners) doesn’t get the documents done within the shortened time frame, it loses the ability to collect the unpaid debts.

It’s really not a laughing matter. If you are one of the millions of people who belong to a homeowner’s association, this bill could be really bad news because, quite simply, it will force you to pay.

Here’s the really messed up thing here. The current system has been in place under a deal worked out among the same players about seven years ago when the markets crashed and outstanding debts were a really big problem.  And it has been working pretty well.

But if it ain’t broke — and there is little evidence it is — why break it?

Is it unreasonable for homeowners associations to get paid when (and only when) they provide the service? If excessive fees are truly a problem (where’s the evidence of that?), couldn’t we just put in some standards to protect against them? And if there really is a problem with excessive time or unreasonable fees associated with real estate closings, then shouldn’t the Legislature look at the whole process and all of the other service providers, instead of just singling out homeowners and those who represent them?

All joking aside, I think Rosica was right; if passed, this law could cost homeowners … Or is it condo owners? Anyway, so this guy walks into the Legislature …