Condo trust fund might be diverted
Depending on shortfall, state could use fees paid by owners in other areas

Article Courtesy of The Sun Sentinel

By Joe Kollin

Published September 4, 2007 


    Money paid into a trust fund by every condo owner in the state might be diverted for totally unrelated expenses if the state's budget shortfall is greater than expected during the fiscal year that begins Oct. 1.

    Each of Florida's 20,000 condo associations pays the state $4 per unit annually for regulation, education and mediation services for condo owners. The Legislature-created trust fund, designated for condo purposes only, last year received $4.4 million from the state's 1.1 million condo units.But an emergency plan prepared at the direction of Gov. Charlie Crist would take money from the trust fund and use it for general state expenses if tax collections are lower than expected.

    The State Department of Business & Professional Regulation lists the following possible reductions in condo services if it must dip into the trust fund:

    *Eliminate all classroom instruction for condo owners and directors at locations throughout the state, for a savings of $240,000. Online instruction would continue at a cost of $10,000.

    *Reduce the state's authority to investigate unit owner complaints that involve "day-to-day" types of disputes. Instead, it would handle only complaints that involve finances, access to records and elections. This would let the department eliminate 12 positions for a savings of $673,331.

    *Do away with the free mediation service the department provides when owners have disputes and, instead, refer owners to private mediators, for a reduction of three employees and a savings of $168,700.

    *Reduce Condo Ombudsman Danille R. Carroll's budget by $60,324. It would prevent her staff from traveling to attend condo meetings and to educate owners.

    *Eliminate the position of financial analyst from the ombudsman's staff, limiting Carroll's ability to help boards deal with financial issues, for a savings of $63,141.

    *End mediation for residents of homeowners associations, the only service the state provides those residential associations. Eliminating two positions would save $93,356.

    The department came up with the outline after Crist in June warned the state will receive $1.1 billion less revenue than originally projected.
    Not only does state law designate the trust fund must be used only for condo owners, the Legislature in 1991 and 1992 required that the fund be used to provide education. In 1992, legislators raised the fee charged each unit from $1 to $4.

    To divert money would require changing state law. The Legislature on Sept. 18 begins a three-week special session to cut the budget and could consider raiding the state's several trust funds.

    Crist's office on Friday didn't respond to questions about the condo cuts.