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IRRESPONSIBLE LOANS
By
Jan Bergemann
Published
November 6, 2015
You wouldn’t believe how many e-mails
I get from community association members complaining that their
board took out huge loans – some for paying for necessary
maintenance and repairs, but many others just being lines of
credit -- money easier to spend without asking the community
members.
Not too long ago a board member came
up with this excuse for taking out a line of credit: “We had
only two options: Taking out a line of credit – or raising the
monthly maintenance fees.” Did he think that the money used
from a line of credit doesn’t have to be repaid – with lots of
interest? Where does he think the money repaying the loan is
coming from?
Most every time a community
association takes out a loan some owners lose their homes
because they just can’t afford to pay the increased maintenance
fees caused by the necessary repayment of the loan.
Let’s face it: The banks are not
Welfare Agencies – and they loan the money for one reason: To
make lots of money! This money comes from the association
members. And if some of the neighbors default on the payments of
maintenance fees, the other neighbors have to pay even more.
Many board members use the same
argument we heard when holding town-hall meetings all over
Florida promoting the bill that finally created mandatory
reserve funds: “We are long dead before our building needs a new
roof!” – or something similar. Now the excuse is: “We will be
long dead before the bulk repayment is due!” I can assure you:
Quite a lot people live much longer than they think – and the
older you get the more difficult it is to deal with getting
kicked out of your home.
With other words: Board members:
Please think twice before taking out a loan and talk to the
membership and ask for their opinions. Don’t make “executive”
decisions. Remember: You and all your neighbors have to repay
the loan. So, all of you should be involved making the decision
if a loan is really needed and if it is the best way to solve
the financial problem.
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Jan Bergemann is president of Cyber Citizens For Justice,
Florida
's largest state-wide property owners' advocacy group.
CCFJ works on legislation to help owners living in
community
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associations. He moved to
Florida
in 1995 - hoping to retire. He moved into a HOA, where the
developer cheated the homeowners and used the association dues
for his own purposes. End of retirement!
CCFJ was born in the year 2000, when some owners met in
Tallahassee
- finding out that power is only in numbers. Bergemann was a
member of Governor Jeb Bush's HOA Task force in 2003/2004.
The organization has two websites to inform interested
Florida
homeowners and condo owners:
News Website: http://www.ccfj.net/.
Educational Website: http://www.ccfjfoundation.net/.
We think that only owners can really represent owners, since all
service providers surely have a different interest! We are
trying to create owner-friendly laws, but the best laws are
useless without enforcement. And enforcement is totally lacking
in
Florida
!
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