An Opinion By Jan Bergemann 
President, Cyber Citizens For Justice, Inc. 

Published November 25, 2009


Once upon a time there was a group of condo board members who called themselves the COUNCIL OF PRESIDENTS. Board members of single condo associations belonging to this COUNCIL "donated" more than $120,000 of association funds to this Council in order to campaign for a SPECIAL RECREATION TAX DISTRICT. These presidents were not only using the association fees to burden the owners with higher taxes, these fees were actually used to fund the campaign -- against the will of a lot of condo owners. By the way, these same condo board members removed signs to VOTE NO on the tax district, paid for by other condo owners, before the election: DEMOCRACY AT WORK!


You may have guessed it already: I am talking about the Palm Aire Condominiums in Pompano Beach. As you can imagine, people protested that their money was used to campaign for a tax district that will increase their tax obligations -- without their consent -- and that this money went to an organization that existed by name only -- an organization not even incorporated. This all was organized by some board "presidents" and George Brummer, the Vice Mayor of Pompano Beach. In my opinion these people clearly "laundered" money from association accounts and used it for their own private agenda. Minimum Vice Mayor George Brummer should have known better; he isn't one of these volunteers who always use the excuse that they didn't know better, even if common sense alone should have told them that what they are doing is wrong. Why do so many board members always think that they can use association funds to further their own private agendas?


According to my information, more than $120,000 was collected for that purpose. In the end some of the money was returned to the associations, but some of the condo associations still had to levy special assessments because of budget deficits. This added insult to injury!


But not all of the unused money was returned. The smart council members kept some of the money to pay for the cost of creating a not-for-profit corporation named PALM AIRE UNITED, INC. This organization is regulated by FS 617 and doesn't have the stricter financial regulations of FS 718 -- the CONDO ACT. Money in the coffers of this organization can be used for anything the board likes to use it -- even if it pays for fancy dinners and/or a cruise.


The system is very easy: The condo board members of the Palm Aire condos can "donate" unlimited funds to this organization under the cover of serving the betterment of the community: SO SAYS THE DBPR! These association funds are no longer in the hands of the association, meaning the owners no longer have the ability to check financial statements to see what happened with their money. 


In other words: The money is moved from the association accounts to an account that is no longer regulated by FS 718.


And when owners complained that their money was used for purposes not allowed by their CC&Rs, the DBPR folks -- in their infinite wisdom -- found an excuse to cover up for these smart board members. Just read the great explanation by Financial Analyst II Maria Vidal in her letter dated October 28, 2009:   (The important paragraph of the letter is copied below.)


Signed by 

Maria T.Vidal
Financial Examiner/Analyst II
Bureau of Compliance -- South Florida Section

3. Finally, you alleged that the Board improperly voted at a board meeting held on June 30 , 2009, to fund non-budgeted money into a group called "Palm Aire United" when it decided to join the organization.

As discussed, the board is empowered to run the affairs of the Association; this includes the Association has the right to make a business judgment to join organizations it deems to be for the betterment of the community. As such, the payment made to join the "Palm Aire United", an organization established for the betterment of the Palm Aire community, as detailed in the meeting minutes you supplied with your complaint, is a legitimate common expense under sections 718.111(3) and 718.115(1)(a), Florida Statutes. Additionally, any services obtained through such an organizational allegiance shall be treated as any other expense incurred by the Association if the services were obtained independent of the alliance.


I'm not sure what this financial analyst read between the lines of 718.111(3) and 718.115(1)(a), but I surely don't read in these provisions anything that allows some board members to shift money from an association account regulated by FS 718 to an organization that has very limited supervision. But we all know the great ability of DBPR employees to invent favorable interpretations to show that board members really did nothing wrong -- even if the statutes and the governing documents of the community association say so!

Why do we have statutes if the DBPR as the regulatory agency is allowed to circumvent these laws and come up with their own interpretation of these laws -- interpretations that only too often contradict the legislative intent of these same statutes!


FS 718.111(3)  POWER TO MANAGE CONDOMINIUM PROPERTY AND TO CONTRACT, SUE, AND BE SUED.--The association may contract, sue, or be sued with respect to the exercise or nonexercise of its powers. For these purposes, the powers of the association include, but are not limited to, the maintenance, management, and operation of the condominium property. After control of the association is obtained by unit owners other than the developer, the association may institute, maintain, settle, or appeal actions or hearings in its name on behalf of all unit owners concerning matters of common interest to most or all unit owners, including, but not limited to, the common elements; the roof and structural components of a building or other improvements; mechanical, electrical, and plumbing elements serving an improvement or a building; representations of the developer pertaining to any existing or proposed commonly used facilities; and protesting ad valorem taxes on commonly used facilities and on units; and may defend actions in eminent domain or bring inverse condemnation actions. If the association has the authority to maintain a class action, the association may be joined in an action as representative of that class with reference to litigation and disputes involving the matters for which the association could bring a class action. Nothing herein limits any statutory or common-law right of any individual unit owner or class of unit owners to bring any action without participation by the association which may otherwise be available.


FS 718.115(1)(a)  Common expenses include the expenses of the operation, maintenance, repair, replacement, or protection of the common elements and association property, costs of carrying out the powers and duties of the association, and any other expense, whether or not included in the foregoing, designated as common expense by this chapter, the declaration, the documents creating the association, or the bylaws. Common expenses also include reasonable transportation services, insurance for directors and officers, road maintenance and operation expenses, in-house communications, and security services, which are reasonably related to the general benefit of the unit owners even if such expenses do not attach to the common elements or property of the condominium. However, such common expenses must either have been services or items provided on or after the date control of the association is transferred from the developer to the unit owners or must be services or items provided for in the condominium documents or bylaws. Unless the manner of payment or allocation of expenses is otherwise addressed in the declaration of condominium, the expenses of any items or services required by any federal, state, or local governmental entity to be installed, maintained, or supplied to the condominium property by the association, including, but not limited to, firesafety equipment or water and sewer service where a master meter serves the condominium, shall be common expenses whether or not such items or services are specifically identified as common expenses in the declaration of condominium, articles of incorporation, or bylaws of the association.