Tolusa Olorunnipa, Miami Herald

A new law offers a stark choice for South Florida condo renters living in units owned by people who are behind on their maintenance fees: Fork over the rent money to the association, or face eviction.

The “Distressed Condominium Relief Act,” signed by Gov. Charlie Crist on June 1 and active as of Thursday, gives condo associations the right to demand renters in delinquent units to pay rent directly to the association rather than to unit owners. While the law offers protections for renters who comply, those who don’t could face eviction.

It’s the latest development in an ongoing saga between cash-starved condo associations, and investor-owners who have stopped paying condo maintenance fees since the market crashed.

Omar Ibrahem, who moved out of a rental last year because its owner went into foreclosure, said he hadn’t received any notices about the new law at the unit he rents on Miami’s Brickell Avenue.

“I haven’t heard or haven’t received any notices that they are pursuing delinquencies,” he said. But after his experience last year, he plans to monitor the situation carefully.

After years of penny pinching and legal maneuvering to collect maintenance fees from sometimes-recalcitrant condominium owners, condo associations are looking to the new law to help increase cash flow.

Renters, who have flocked to condos by the thousands in areas like downtown Miami and South Beach since the crash, are suddenly in the spotlight. Many have been living in modern buildings with a slew of amenities, often unaware that condo owners had stopped paying the fees that fund them.

Beginning this month, some renters will receive letters asking them to fork over rent money directly to condo association boards. Unit owners will not be allowed to take any action against renters who pay a portion or all of their rent to the association.

“It gives the tenants more peace of mind,” said Jon Mann, owner of Five Star International Realty in Miami. “They can pay the association a portion of their rent and they know they won’t be kicked out.”

But lawyers and homeowner association members say the law’s wording isn’t completely clear. The most hotly debated point is whether or not associations can collect payment for past due fees that have accrued over time, or only for monthly assessments due after July 1.

“My recommendation to my clients is to act conservatively, because this law is brand new,” said Lisa Magill an attorney at Hollywood-based Becker & Poliakoff, a large condo association law firm.

But many condo boards, severely strapped for cash, are taking the more aggressive position, said Bill Worrall, corporate vice president of property management company The Continental Group.

“Practically, the association will collect 100 percent of the rent until the account is brought current,” said Worrall.

For example, a renter paying $1,000 a month for a condo unit that is $5,000 behind on monthly fees might be asked to turn over his entire rent check to the condo association for five months, and then hand over a portion of his rent to cover fees for the remainder of the lease.

Delinquency rates have surged in recent years as the economy has tanked along with home values, leaving some investors acting in bad faith and the newly unemployed unable to pay maintenance fees.

The investors, who have opted to “strategically default,” or intentionally abandon a mortgage along with associated fees, often do so in bulk, leaving a trail of foreclosures and a gaping hole in many condo association budgets.

Read more: http://www.miamiherald.com/2010/06/30/1709704/with-new-law-condos-get-new-tool.html#ixzz0sQvsBpxo