The HEROES Act Spells Disaster for Community Associations
Your association’s ability to collect assessments is in grave danger because of H.R. 6800, the Health and Economic Recovery Omnibus Emergency Solutions Act or The HEROES Act!
By the time you read this CALL Alert, this bill will have likely eked out a narrow passage in the U.S. House of Representatives. The next step is the U.S. Senate. If passed by the Senate in its current form, the HEROES Act would prohibit the collection of consumer debts from the date of implementation of the act until 120 days after the end of the Emergency Declaration declared by President Trump in response to COVID-19. Since the national State of Emergency is ongoing since March 13, there is no way to determine how long this ban on collecting assessments would continue.
The Heroes Act would restrict condominium, homeowners, and cooperative associations from collecting assessments which are considered consumer debts when units are owned and occupied as primary or secondary residences. As our CALL members know, assessments are typically the sole source of revenue which fund the essential services for private residential communities. Without assessments, community associations may find it impossible to operate as they would have no way to enforce the payment of assessments, while their expenses, including insurance premiums, payroll, maintenance and utilities continue to accumulate.
If board members have so far had difficulty dealing with the fallout from temporarily closing community pools due to the dangers from COVID-19, imagine what would happen if the shared amenities, including the pool, are subject to an extended closure because your association is not receiving revenue to maintain the heightened sanitization protocols that are necessary to keep them open?
While the HEROES Act will negatively impact community associations throughout the U.S., Florida communities will be particularly hard hit as we are heading into our six-month hurricane season. Without the ability to collect assessments for the foreseeable future, our Florida communities may be placed into the untenable position of not being able to pay for the uninsured losses and repair costs this hurricane season may bring. For some associations, the impact from this federal legislation will be even more pernicious as they try to renew their insurance coverage while their revenue stream is severely impacted.
The HEROES Act will burden your association with the determination of which unit owners are considered consumers and which are non-consumers, as some units are the owner’s primary residence, some are a secondary residence, and yet others are investment properties. An erroneous determination of the nature of the debt will expose your association to significant financial penalties under the HEROES Act.
NOW is the time to contact your U.S. Senators and ask them to be sure to insist that private community associations be exempt from the prohibition against collecting consumer debts.
Contact Senator Marco Rubio by clicking here or by calling (202) 224-3041.
Contact Senator Rick Scott by clicking here or by calling (202) 224-5274.
A link to The HEROES Act can be found by clicking here.
Together we can stave off this potential disaster in our communities.