Article Courtesy of NewsWeek

By Giulia Carbonaro

Published  June 24, 2024

Florida Governor Ron DeSantis on Friday signed into law a sweeping new condominium bill that tries to defend the rights of unit owners against board members' abuses.

House Bill 1021, which was passed unanimously by the Florida legislature in March, is intended to fight corruption and malfeasance amid condo board members and associations by strengthening oversight on their work while giving more rights to condo owners. It also gives state authorities more power to investigate potential abuses.

"Condo 3.0," as the new law has been dubbed by its sponsor, State Representative Vicki Lopez, a Miami Republican, will come into effect on July 1. It is "such a game-changing piece of legislation," Lopez told Newsweek.

The bill creates new education requirements for condo managers, demanding that board members spend four hours learning how to run a condo association, and creates more transparency around them. The law says that condos with 25 units or more must set up webpages including documents such as bylaws, budgets and lists of contractors with vendors. Condo boards are also prohibited from stifling dissent through the filing of defamation lawsuits.

Crucially, the law also addresses a previous loophole in the authority of the state's Department of Business and Professional Regulation (DBPR), eliminating a line from Florida Statutes that prevented it from enforcing condo and condo association laws. Condo owners will now have their rights protected by state law and will be able to complain about mismanagement or corruption to the DBPR, which will have the undiscussed jurisdiction to intervene.

The bill secures $7.4 millions in funds to support the DBPR in enforcing the relevant laws to regulate condos in Florida.

Lopez said it was game-changing "because there's been a lot of complaints from condo owners, and condo board members and property managers, and even the department about governance issues."

"Some of the biggest issues coming from condo owners were related to the access to records. Condo owners feel like they should have complete access to the records of the condo board, and they weren't getting them. That coupled with election fraud, a lot of condo owners have complained that the condo board has committed election fraud during the elections," she said.

"And so this piece of legislation actually, increases both transparency and clarity for boards and for property managers. But more importantly, what we learned was that the department did not have the statutory authority that we thought they did."

After learning this, Lopez said, they gave the department more statutory authority as well as more funding. "So now we feel very confident that the department will be able to regulate condos in the manner in which we thought they had always been able to, but weren't."

Florida is facing a difficult time amid soaring insurance costs and growing fees for homeowners. The Sunshine State, which has been struggling for years with excessive litigation and widespread fraud in its insurance sector, is now seeing residents crushed by skyrocketing premiums as insurers try to keep up with the higher risk posed by more frequent and more severe natural disasters.

However, the biggest incentive for lawmakers to strengthen regulations around condos was from the catastrophic collapse of a condo tower in Surfside, Florida, in 2021, which caused the death of 98 people.

Among the causes of the disaster, investigators identified several potential structural failures that had compromised the integrity of the building. Some of the condo's parts did not meet standard building-code requirements at the time the tower was constructed in the 1970s. Part of the blame was attributed to the condo association, which had deferred structural repairs on the building.

However, the new bill hasn't been welcomed by all condo unit owners with the same enthusiasm. Some in South Florida are threatening to sue if lawmakers don't change provisions in the bill that give developers more control over common areas in mixed-use buildings, as reported by the Tampa Bay Times. A mixed-use condo includes a combination of residential, retail, and corporate space.

Common areas in mixed-use buildings are often at the center of controversies and disputes between condo owners and their associations and developers over who should shoulder the cost of repairs and maintenance, and who controls these spaces.

The new law, according to critics, would take control of these common areas away from unit owners.

"Everyone is required to reserve now for their piece of the building," Lopez told Newsweek.

"Say there's retail shops on the first floor and condos on the second to fifth floors, and corporate offices on the top floor. Condo owners only have to reserve property for those portions that are condos, not the first floor or the top floor. We gave a lot of clarity on this." But, according to Lopez, there are people who have bought into hotel condos thinking "it was like any other condo, but it doesn't work that way because what drives that is the declaration document, which people did not read."

She added: "Now, as a result of not doing their due diligence, they're getting hit with reserves that they have no power over. They feel like somehow my bill is taking away their rights over their condo, but that's not at all true because the declaration document is what defines what rights people have to what pieces of the property."