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 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  

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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