Grand jury calls Florida agency inept and ill-suited to probe condo complaints

Article Courtesy of The Tampa Bay Times
By Susan Taylor Martin

Published February 27, 2017


In Pasco County, residents of one community were shocked when their homeowners association approved a special assessment for new roofs even though a study showed most of the existing roofs still had years of "useful life.''

In a Tampa high-rise, condo owners are fighting a $600,000 assessment they say will mostly benefit an investment group that is trying to convert the entire building to rentals.


And in Miami, unit owners watched in vain as what officials called a "condo crime family'' spent years rigging association elections and stealing association funds.

Those are the types of complaints that regularly flow into Florida's Department of Business and Professional Regulation, the state agency charged with investigating allegations of wrongdoing by condominium associations and, in some cases, homeowner associations. Yet the DBPR is "ill-suited" and ill-prepared for the job.

That's the conclusion of a Miami-Dade grand jury that spent weeks looking into how DBPR handles complaints and came away "shocked,'' "amazed" and "exasperated" by what it found.

In a scathing report released this month, grand jurors said the agency's Bureau of Compliance has too few investigators —- just 33 for all of Florida — and shows a "breathtaking'' failure to adequately train them, as evidenced by two investigators who grudgingly appeared before the panel.

"We learned that there was no requirement of prior investigative experience and no formal investigative training was offered," the grand jury said. "The investigators learned 'on the job' and appeared completely dependent upon their supervisors. The investigators expressed no eagerness to root out corruption or solve problems, and did not seem empowered to make any independent decisions."

Residents of Weymouth, from left, Barbara Hospel, 79, Angelo Anello, 68, Jim Dolan, 44, and David Coreen, 46, stand in front of Dolan's villa in the neighborhood of 234 villas in Land O' Lakes last week. They are among those who disagreed with the neighborhood homeowner's association over assessments for new roofs on all the villas -- and the way it was approved and managed.

"Our clear sense," the panel said, ''is that the investigators were more intent on closing cases than solving them."


A DBPR spokesman said the agency is reviewing the grand jury report, which includes numerous recommendations for changes in state law and agency rules.

"The Department takes very seriously its statutory obligations regarding the enforcement of condominiums," communications director Stephen Lawson said.

Florida has 1.5 million condo units — including more than 150,000 in Tampa Bay — that are governed by elected boards made of unit owners. DBPR receives hundred of complaints each year, typically involving accusations that board members violated association election rules, failed to make records available to other owners or engaged in self-dealing.

Self-dealing is an issue in at least two Tampa Bay cases.

In Weymouth, a 232-unit south Pasco community, some residents charge that four board members had their own interests at heart last year when they approved a special assessment for new roofs even though a 2013 engineering study showing most of the existing roofs would last another 12 to 15 years.

After board member Barbara Hospel resigned in protest, the other four members imposed the assessment anyway without the required approval of 67 percent of owners, homeowner David Coreen says. Those four got their roofs first, which were twice as expensive — and presumably of better quality — than the roofs that went on the other 228 units, Coreen says.

"You had a couple of people that decided they wanted a brand-new roof so they disregarded the community's voice and passed it illegally," said Coreen, who with two other owners has sued the board. "We have an example of a board that does whatever they want."

Although their roofs cost more, the four board members paid the same $4,500 assessment as those with cheaper roofs. Some residents couldn't afford the assessment under either of the alternatives the board approved — a $4,500 one-time payment or $5,000 over a year.

As a result, "there are people now facing liens and foreclosure because of a wholesale roof replacement that was not needed," Coreen said.

Board member Tina Brown said the owners' claims were "not totally accurate" but she declined to comment further. One owner, Angelo Angello, said he tried to file a complaint with DBPR about the board's actions but the response he got was: You need a lawyer.

Similar accusations of self-serving condo board members have surfaced elsewhere.

In Tampa's Slade at Channelside, owners say an investment group that controls the association board is trying to enrich itself at their expense.

Brandon McArthur and other owners are starting legal action against the St. Petersburg-based group that has acquired almost enough units to dissolve the condo association and convert the building to apartments. The group already rents out the units it owns.

After McArthur and others refused to sell last year, the investor-controlled board approved a special assessment that was due in full in 30 days.

Two weeks ago, notice went up of a new, $599,753 assessment that includes $117,169 for "gym modernization," nearly $90,000 for "pool furniture and lounge area" and $63,444 for an unspecified "rooftop amenity.''

"There are very minimal capital improvements on this assessment," said McArthur, who must pay $1,167 by March 25. "They are carrying through with the threat they made of assessments with the ultimate goal to get private owners to sell to them so they can terminate our condominium."

McArthur, a scout for the Los Angeles Angels, said he and other owners didn't bother to file a complaint with DBPR because, "according to that grand jury report, it doesn't look like it would have done us any good anyway."

While noting that condo owners statewide have complained to and about DBPR, the report spotlights some especially egregious South Florida cases including what the media dubbed the "condo crime family."

DBPR received more than 30 complaints about the married couple and their daughter "rigging elections" and "stealing funds" while serving on association boards. But if not for a lead generated by law enforcement in an unrelated case, "the family might not have been stopped," the report says. (The trio pleaded guilty to felonies, were sentenced to probation and ordered to pay $500,000 in restitution.)

In another case, a Miami condo owner who appeared before the grand jury described her lengthy battle to obtain records from the association board.

"The frustration of this witness was apparent to us all," the jurors said. "She has written to nearly every major figure at the DBPR… She cannot understand why the DBPR allows this behavior to go on, and frankly, neither can we."

In their report, the grand jurors said one of the major problems with DBPR is the sheer number of areas it regulates — from veterinarians to real estate agents to electrical contractors to the state Boxing Commission.

"Looking at this wide array of professions and services, one cannot help but recall the comment, 'a jack of all trades, a master of none,'" the jurors said. The DBPR's "inept" handling of condo complaints made them wonder if the job could be done better by another agency, though jurors were unsure which agency that should be.

Among the panel's recommendations:

  • If the Bureau of Compliance — which has an office in Tampa — is split off from DBPR, it should have the authority to conduct criminal investigations. Investigators should be trained in "basic investigative techniques" and have the authority to take sworn statements, collect evidence and initiate investigations based on their personal observations.

  • Association directors and board members who "wilfully and repeatedly" refuse to turn over records should be personally liable for payment of damages to the unit owner who requested them. "The willful failure to provide such documents may be part of a broader scheme to cover up embezzlement or other financial wrong-doing by the board or association,'' the jurors said.

  • State law should be amended to bar directors and board members from voting on contracts in which they, a relative or a company they're associated with have an interest. "Some directors appear to view the ability to get into office as an opportunity to cash in," the jurors said. "This should not be countenanced."

The grand jurors said their own investigation exposed "severe weaknesses'' with current laws and rules governing condominiums.

"Board directors, management companies and associations have become emboldened in their refusal to abide by and honor existing laws in this area," the panel concluded. "They even engage in fraudulent activity that goes unpunished."