Article
Courtesy of The Florida Bar
By Jim Ash
Published November 24, 2023
'It’s based on the noble premises that
elected board members will always do what’s right.
Unfortunately, I find in my job, that’s not always the
case'.
A panel of experts, including a veteran prosecutor and a
Real Property, Probate & Trust Law Section member, urged a
Senate committee Tuesday to tighten restrictions on condo
associations.
Miami-Dade State Attorney Katherine Fernandez Rundle recently expanded the
Economic Crimes Unit to handle a flood of resident complaints, its chief,
John Perikles, told the Regulated Industries Committee. Perikles estimated
that he is meeting weekly with residents who have complaints.
“People ask, could it really be that bad? Yes, it is that bad. I believe
that there are major problems that need to be addressed,” Perikles said.
Lawmakers revised Chapter 718, Florida’s condominium statute, after the
Champlain Towers South collapse in 2021 killed 98 Surfside residents.
The revisions included mandatory structural inspections, but more needs to
be done, said Tallahassee attorney Pete Dunbar, who represents the Real
Property, Probate & Trust Law Section. Dunbar stressed that the section is
not taking a formal legislative position and that he was there merely as a
technical advisor.
Dunbar pointed to the final sentence of §1 of Ch. 718, which gives the
Division of Florida Condominiums, Times Shares and Mobile Homes the power to
investigate complaints.
Dunbar suggested, among other things, that lawmakers give regulators more
authority to initiate investigations, and expand the responsibilities of
professional management companies.
The RPPTL’s Condominium Law and Policy Life Safety Advisory Task Force, and
a Miami-Dade grand jury, recommended a host of changes after the disaster,
including increasing education for board members, and giving residents
greater access to association records.
But Perikles, a 34-year prosecutor, said the law does little to force bad
actors to comply with records requests.
“It’s based on the noble premise that elected board members will always do
what’s right. Unfortunately, I find in my job, that’s not always the case,”
he said.
Perikles said one condominium resident spent $162,000 in legal fees to
obtain association records.
“There are no consequences for those people who are hiding the records,”
Perikles said, adding that lawmakers should consider criminal penalties.
“I’m not talking about the death penalty. We’re talking about building
blocks,” he said. “Then we can try to get to people that are actually trying
to commit fraud.”
Perikles said he was astonished that Ch. 718 doesn’t prohibit kickbacks from
contractors, a common way corrupt board members can enrich themselves.
Board members have demanded free work on their units in exchange for a
contract, Perikles said. One board member asked a contractor to overcharge
the association $50,000 and give the money to him, Perikles said.
“The contractor wants the job, so he gives a kickback,” Perikles said.
“They’re like the governors of small towns, and they’re not subject to the
laws.”
Spencer Hennings, who served as Florida’s condominium ombudsman for three
years before joining Shutts & Bowen in Ft. Lauderdale, said most residents
have a relatively quick and inexpensive way to resolve disputes with their
condominium associations.
“We have non-binding arbitration, and the arbitrators generally do a good
job,” he said. “The problem is, they don’t have the power to enforce their
orders. They’re non-binding.”
Few condo owners have the resources to fight their association in circuit
court, Hemmings said.
Condo owners have the authority to recall elected boards, but if a board
refuses to step down, there’s little the unit owners can do, Hennings said.
Owners can file a complaint in circuit court, but it is unlikely to be
resolved before the next board election, Hennings said.
The suits get dismissed as moot, he said.
“My main point today is that the current system is very good, if the board
are good actors,” he said. “But if the board is corrupt…the system is
inadequate.”
Miami-Dade Bar Executive Director Bret Berlin estimated that 20% of all
condominium residents in Florida reside in his county.
The association is getting flooded with requests for help from condo
residents who are facing skyrocketing insurance rates on top of the
increased costs of complying with the Champlain Towers-related reforms,
Berlin said.
“We’re not talking thousands of dollars, we’re talking millions of dollars
in assessments for these units they have lived in half their lives,” he
said.
The association is putting together a program with three components to help
residents meet the challenge, Berlin said.
Pro bono attorneys can offer condo residents education and advice on how
they can help themselves, he said.
The association is working with four law schools to recruit students who can
help residents navigate paperwork and find other local assistance, he said.
Finally, the association can offer pro bono attorneys to represent the
residents, Berlin said, but “that resource is obviously limited.”
“We can put together a short-term program to assist in this crisis while the
law is addressed,” Berlin said.
Sen. Jennifer Bradley, a lawyer/lawmaker from Flemming Island, led the
reform effort in her chamber after the Surfside tragedy. She said she spent
the summer meeting with all stakeholders and is working on more legislation
for the upcoming session that convenes in January.
Bradley noted that condominium associations manage an estimated $7 billion
worth of assets in Florida.
“It doesn’t matter who you talk to, nobody thinks this process is set up to
help unit owners,” she said.
|