Rise of the Ombudsman

By Juliette Guilbert, Freelance writer in Miami, Florida.

Article Courtesy of "Common Ground"

From the July/August 2007 issue


If an association ombudsman is good enough for Florida and Nevada , maybe it's good enough for other states, too.

When Claire Fortini moved into the Seaport Oceanfront Condominiums in Cape Canaveral , Florida , she got a bit more than the retirement paradise she was expecting. The four new high rises were plagued by maintenance problems. The builder was unresponsive and the condominium association seemed powerless.

"There was such acrimony between two of our three board members that nothing was getting done," Fortini says. "The association president was caught between the developer's representative and the homeowner member. The board meetings would end in shouting matches, and no business was conducted."

"We went through three board presidents from January to August [2006]," she says. "Many residents had never lived in a condominium before and had no clue of the law. We were looking for somebody to help us out of our morass." That somebody was Danille Carroll , Florida 's condominium ombudsman, who spoke at a Seaport Oceanfront board meeting in August 2006 about board responsibilities; recommended five board members instead of three; and called for volunteers. Fortini stepped forward.

"The next thing I knew, I was board president," she says. By the end of September, the board had hired a new manager and attorney, created a new budget, and begun to address maintenance issues. "I have no idea how things would have turned out without the ombudsman's help. Maybe the state would have had to take over, we were in such turmoil."

In 2004, Florida became the second state to create an ombudsman for community associations; the other, Nevada , has had an Ombudsman for Owners in Common-Interest Communities since 1997. In recent years, legislatures in several states, including California and New Jersey , have contemplated similar positions, prompted largely by constituents concerned about issues ranging from contested board elections to whether they can put political signs in their front yards. Organizations like the ACLU and AARP are pushing for ombudsmen, pointing out that in some states, no government agency is enforcing condominium statutes, while in others, agencies are understaffed and underfunded.

But many in the community association industry—including attorneys, managers and some board members—view the ombudsmen with trepidation, fearing state meddling and reams of red tape. "Resolving homeowner disputes and building effective community governance cannot be outsourced to the statehouse," says Andrew Fortin, CAI's vice president of government and public affairs. "It's not an efficient use of resources to have state employees sorting out disputes relating to private, contractual agreements between neighbors. Our focus is on empowering individuals to solve these problems within communities rather than to place that burden on the state."

This is more than mere rhetoric. Since 2004, CAI has promoted Rights and Responsibilities for Better Communities, 42 principles to help association-governed communities promote harmony, enhance communication and reduce conflict.

CAI has successfully opposed ombudsman legislation in California and Virginia , and its New Jersey Legislative Action Committee is fighting a bill that would create an ombudsman within the Department of Community Affairs.

Rutgers Law professor, Frank Askin, says that an ombudsman is needed in New Jersey to advise and advocate for homeowners—a task currently handled, he says, by a lone worker in the state's Department of Community Affairs. "People are desperate for help when they have disputes with their associations," he says. "Most of these people can't afford to hire a lawyer—and, if you do, you're paying for both sides, because your assessment is also paying your association lawyers. Somebody's got to represent the interests of the homeowners."


Where community association ombudsmen do exist, the job can be fraught with conflict. Florida 's first ombudsman, Dr. Virgil Rizzo, was abruptly fired in June 2006 by then-Governor Jeb Bush, who had appointed him 18 months earlier. According to Rizzo—and to outraged supporters like Jan Bergemann, president of Cyber Citizens for Justice, a homeowners' group—he was fired for doing too good a job of advocating for owners, monitoring contested board elections, and suggesting how to improve the Division of Condominiums, part of the state's Department of Business and Professional Regulation (DBPR).

"The job was being carried out too effectively, according to normal operating procedure in Tallahassee ," Rizzo says.

Bergemann agrees. "From day one, the ombudsman office had serious problems because there was no financing," he says. "The attorneys didn't like it because somebody was watching what they were doing, and sometimes what they are doing doesn't need the light of day. And with all kinds of maneuvering, they finally got the governor to fire him. A lot of owners thought that was a serious mistake."

At the time of Rizzo's firing, a DBPR spokesperson interviewed by the Miami Herald said the retired physician had failed to follow state procedures such as submitting time sheets, and had refused to respond to a records request from the Fort Lauderdale law firm Becker & Poliakoff, with whom, according to Rizzo, he'd had a disagreement over election monitoring. An attorney with that firm, Donna Berger, says that she isn't sure why Rizzo was fired, but she believes he overstepped the bounds of his office, and favored homeowners involved in disputes with their boards.

"He was involved in a lengthy, costly legal battle with his own board," she says. "A lot of his proposals seemed to indicate a bias. He had a very clear direction for that office that would have given him a lot more power and a much bigger salary than initially envisioned, and that's where he ran into problems."


Governor Bush named Carroll the new ombudsman immediately after Rizzo's firing. A former regulatory prosecutor with the state Department of Health, Carroll had no experience in community association law, but ruffled fewer feathers in her first year on the job than did Rizzo. Carroll stresses that she is an unbiased advocate for all. She gets high marks from people like Berger, who praises her emphasis on education about, rather than enforcement of, condo law. "Danille is great," Berger says. "We've worked with her—education is the way to go. You've got the division doing enforcement already." Even Rizzo praises Carroll's ability to "network with the politicos in Tallahassee ."

Carroll says she's spent much of the past year learning about community association issues and talking to residents, boards, and attorneys. Although her office is asked "on a daily basis" to help resolve intra-association disputes, Carroll says, "It's not just owners. We get calls from a lot of board members and attorneys. It's a good mix of phone calls."

However, according to State Rep. Julio Robaina, who pushed for the ombudsman's position in 2004, it was ultimately the need to help owners—especially in disputes with their associations—that drove the legislation that created Carroll's office. "I felt owners needed somewhere to get information, help, and training to understand the bylaws and the election process—a neutral party, who would be there for the average citizen who was having problems in the association," Robaina says.

Of course, many industry professionals and board members believe that more state interference is the last thing associations need and maintain that the vast majority of communities are not, in fact, plagued by dissent and malfeasance. CAI's California Legislative Action Committee last year helped defeat a bill to establish a community association ombudsman in that state. Committee administrator Skip Daum says that the group supported the portion of the bill that created homeowner education programs, but opposed the creation of an ombudsman with enforcement powers.

"It would have levied fees of $40 million on homeowners to create a new agency that would have told associations what to do," he says. "If they failed, they'd be fined." California has no agency to enforce community association laws, but Daum says that an ombudsman was prompted more by legislators' desire to please voters than any real need. "We thought it was an overreaction to complaints from constituents to 'do something,'" he says.


Daum echoes the cautions issued by many in the community association industry about the cost of an ombudsman. Lucia Anna "Pia" Trigiani, Esq., a member of CAI's Virginia Legislative Action Committee, says that when Virginia considered an ombudsman years ago, her group had concerns. "If you want a full-blown regulatory program, you've got to pay for it; and do associations want to add that to the list of what they have to pay for?" she asks. (In Nevada , associations pay $3 per door per year to the ombudsman's office; the Florida ombudsman's office receives $560,000 per year from the state Condominium Trust Fund.) Rather than an ombudsman, Virginians got the Common Interest Ownership Management Fund, which charges associations an annual fee of $25 for education programs.

In some states, other agencies perform some of the functions of an ombudsman. In Hawaii , the Real Estate Commission administers condominium governance mediation programs and an education fund. In Arizona , residents involved in disputes with their boards have the right to a hearing before an administrative law judge in the state's Office of Administrative Hearings (OAH). Pat Haruff of the Coalition of Homeowners for Rights and Education says her group favors this system over an ombudsman.

"A state ombudsman would have no teeth," she says. "For instance, if your board violates the open meeting law, now you can take them to the OAH, which is going to order them to cease and desist and fine them." The OAH also has the power to turn over boards it deems repeat offenders to the state attorney general, who has the right to remove them.

Curtis Ekmark, Esq., co-chair of CAI's Arizona Legislative Action Committee, says that his group has some concerns about the system. "There's no statute of limitations, the filing fee is really low, there are no real rules of evidence, and there is an unlimited ability to fine associations," he says.

Haruff believes such criticisms are unfounded: the filing fee for the self-funded program is $2,000, she says, far higher than the $50 it costs tenants to file OAH complaints against their boards. As for the fines, she says they are probably too low.


The disagreement between Haruff and Ekmark gets to the heart of the ombudsmen controversy: enforcement. Florida 's ombudsman has no power of enforcement, but that may soon change. Rep. Robaina, with the support of Bergemann's group, is sponsoring legislation that will expand the office's purview to include investigation of fraud complaints and some powers of enforcement—powers Carroll says she is reluctant to take on. "I think the most important component is to be neutral, and with enforcement and investigation you're taking sides." Bergemann replies that in some instances, taking sides is precisely what is called for.

"We had a case in Boca [Raton] where a board president embezzled $650,000," he says. "The homeowners tried for a year to get the documents, but instead got nasty letters from attorneys, and one even got sued for harassment. That's why we need the ombudsman to have a little power."

Robaina says that he envisions the ombudsman as the point person for condominium fraud programs that will train detectives to investigate alleged crimes. "A lot of times, people want these problems to continue, simply because there's money to be made," he says. "When there's a problem, boards call the law firms that represent them, and they bill."

In Nevada , the ombudsman's office has had 10 years to outgrow the initial trauma of its birth, and at least some community association professionals have made their peace with it. Pamela Scott, who is director for community association management for the Howard Hughes Corporation, a major developer, thinks an ombudsman is a good thing, although, she says, it doesn't make her job any simpler.

"It has brought the bureaucracy from a regulatory agency into the job," she says. "Managers have to cross t's and dot i's on just about everything. It's time consuming." One of the biggest headaches, Scott says, is the sometimes-massive document requests. "I had one request for a copy of every design review submitted for paint color changes with no time period," she says. "This is an association of 15,000 homes. There is no way to comply without hiring a full-time person for a year."


Judy Farrah, chair of CAI's Nevada Legislative Action Committee and a property manager with Capital Consultants Management Corporation, agrees that the process can be bureaucratic. "It takes forever to get a response," she says. "But we're definitely seeing that change. The new ombudsman has only been in place for about a year, but she's made more strides in that time than we made in the nine years before that."

Perhaps that's because she's had experience with warring parties. Nevada Common Interest Community Ombudsman Lindsay Waite says she was prepared for her new job by her experience as a public defender in Maryland . "In dealing with different people and issues, with a personal investment in the outcome, it's very similar," she says. "Going to court, interviewing clients, and negotiating—those skills are very helpful when I'm dealing with different interest groups and conflicts."

Waite's duties include educating homeowners and boards about their rights and responsibilities, maintaining a state registry of community associations, and reviewing homeowner complaints. She meets with each party individually, then sets a conference date to try to work it out—about 28 meetings a month. If they can't come to an agreement with Waite's help, they proceed to the Nevada Real Estate Division's alternative dispute resolution program, a prerequisite to going to court.

"We get a number of cases where the homeowner didn't pay a small fine, and with penalties it grows into a large fine," she says. "I don't say one side or the other side is right. I let them talk it through." In many cases, miscommunication is the problem. When misbehaving boards are informed of the law, they frequently comply.

Waite also is working on education initiatives—meeting with managers' groups, association attorneys, board members, and homeowners. Like Carroll, she prizes her role as a neutral resource for all, rather than a champion for one or the other. "Some parties have talked about this position advocating for the homeowners," she says. "But I think it's good to have a neutral person and for parties that are in contention to have at least one chance to sit down and talk."

For states considering ombudsman programs, the unanswered question remains enforcement. Ombudsmen can educate, facilitate, and mediate, but when these measures fail, who should take the reins? The answer, of course, depends on whom you ask: Most in the industry remain chary of handing more control over to the state, but many homeowners are eager to see more enforcement of the laws that govern common interest living. Ombudsmen as neutral facilitators may be palatable to all; the idea of the ombudsman as a state regulatory agency will have to make its way through the (most likely contentious) legislative process.