If a condo association is cheating you, the state should have your back. Too bad it doesn’t

Article Courtesy of  The Miami Herald

By the Miami Herald Editorial Board

Published September 22, 2019

In Miami-Dade County, too many condo associations are charging renters and buyers exorbitant fees before they even move a stick of furniture into the unit. If anyone thinks there ought to be a law against this, there is.

Unfortunately, state enforcement has seriously lagged, and because affordable housing is so hard to come by in Miami-Dade, renters acquiesce.

Joshua and Allison Kobasky, however, didn’t. They won a settlement after they sued the Plaza 851 Brickell Condominium Association, claiming that it had charged them more than $100 in mandatory, nonrefundable “transfer” fees when they sought to lease a unit. The condo association agreed to pay up to $300,000 to settle the class-action lawsuit.

Florida law prohibits associations from charging fees more than $100 a person or married couple to buy, lease or transfer a condo unit. But they do, because they can get away with it.

“Associations have historically charged these fees to fatten their coffers even though they don’t disclose them,” said attorney Aaron Resnick, who represented the plaintiffs in the lawsuit. He told Herald reporters Rene Rodriguez and Nicholas Nehamas that, “They know people need a place to live, and in most cases the inflated fees are not thousands of dollars. Most people will go ahead and pay $250 if it means getting their apartment quicker.”

Greater Miami’s burgeoning luxury-condo market has priced out many potential residents looking for affordable housing.

The Plaza 851 association charged potential residents a $150 screening/application fee and a $200 move-in/move-out fee — $250 more than the state allows. Some can comfortably afford the overcharge. For the financially vulnerable, however, it’s a stretch. Either way, it’s illegal.

Housing experts advise that tenants pay no more than 30 percent of their pre-tax monthly income for rent. In Miami-Dade, however, that advice is a cruel joke. Greater Miami is the third-least affordable city in the United States; the Herald series “Priced out of Paradise” found that at least 60 percent of renters pay more than the recommended 30 percent of their salary for housing.

Our question is: Why has the Florida Department of Business and Professional Regulation, which oversees the Division of Florida Condominiums, Timeshares and Mobile Homes, been so derelict? DBPR officials say that Floridians are not aware of the law. It receives few complaints, many of which are resolved with an awareness campaign and a requirement that a condo association refund the excess fees.

But that excuse only goes so far. DBPR needs to be more proactive, though, given the huge volume of condos statewide, monitoring would be a challenge. Following a rule passed in December 2018, associations face a potential $5,000 fine for charging inflated fees. Still, condo dwellers need to know that the state has their backs when associations engage in blatantly illegal activities. At the very least, the language regulating fees should be prominently displayed on websites and applications.

Members of the property-management industry complaing the $100 cap is not enough to cover screening, background and financial checks to ensure a tenant’s eligibility. If — if — the cap, indeed, is unrealistic, lawmakers should consider an increase, one that is fair, not rapacious, and sensitive to both associations and potential residents. It should take into consideration how stressed many Florida markets are for affordable housing.

Any carefully considered increase should be accompanied by the resources to give DBPR the teeth to ensure condo associations aren’t thumbing their noses at the law. If they have no fear of being fined $5,000, what’s the point?