Upside Down Unit Owners, Lenders Stiff Condo Associations On Maintenance Fees, Leaving Complexes "In A Death Spiral," Says City Official

In Miami Beach, Florida, The Miami Herald reports:

• He frequents the pool at The Venetia condo building. He leaves his Jaguar with the valet. He uses the gym. He's also behind on his mortgage and isn't paying his condo association fees. Neither is his lender, and the association's board worries the bank is delaying foreclosure to avoid paying dues as well.

• Sharon Dodge, president of The Venetia's association, angrily told a crowd of South Florida condo dwellers at a meeting this week that 134 units were not paying maintenance fees in the 382-unit building. Of those, at least 35 are in the hands of lenders who aren't playing fair.

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• Mortgage lenders are drawing the wrath of condo owners as catalyst and culprit of the fallout. ''We are in a death spiral,'' said Miami Beach Commissioner Jerry Libbin, who hosted Wednesday's meeting with state Reps. Julio Robaina and Luis Garcia. ''It's the foreclosures that are not happening, the banks that are not taking the actions that they should be taking that are causing additional assessments to be foisted on good condo unit owners,'' Libbin said.

For more, see Condo boards want banks' 'free ride' to end (Condo owners and local politicians who accuse banks of delaying foreclosures on units to avoid association fees want to change state law in order to stop it).

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In a related story on another Miami Beach condo facing similar problems, the Miami Daily Business Review recently reported that a Miami trial court judge ordered a foot-dragging lender to foreclose & take title to condo unit or start paying the association's maintenance fees. See:

• Desperate times call for desperate measures for condo associations for the story,
• Go here for the condo association's Motion To Compel the lender holding the delinquent mortgage to foreclose,(1)
• Go here for Miami Judge Daryl E Trawick's order compelling the lender to foreclose or start forking over the periodic maintenance fees to the condo association.(2)

(1) In the condo association's motion to compel (at paragraph 12), the Florida court decision in F.D.I.C. v. Venture Corp. of Sarasota, Inc., 622 So. 2nd 581, 582 (5th DCA 1993) is cited as precedent in support of the proposition that in Florida, a trial court exercising its equitable powers can compel a mortgage holder to either proceed with a foreclosure sale or to pay the condominium association's monthly assessments.

(2) In his order compelling the lender to foreclose, Judge Trawick scribbled in the citation to Venture Corp. of Sarasota as the controlling authority in the case before him (See Order, paragraph 1).