Advisory Council On Condominiums -- QUO VADIS?

REPORT BY JERRY MELVIN

CONDO ADVISORY COUNCIL MEETS

By Jerry Melvin

May 16, 2005

 

On May 14, 2005 the Advisory Council On Condominiums met at the Edgewater Beach Resort, Front Beach Road, Panama City Beach, Florida.

 

All members were present:  Joe Adams, Mike Andrew, Michael Cochran, Pete Dunbar, George Geisler, Karen Gottlieb and Tom Sparks.  Present by telephone hookup was Mark Benson.  Chairman Adams opened the meeting and asked the secretary to note that a quorum was present.  Adams also asked the secretary to verify that the meeting had been publicized in a timely manner and that notification had been included in Florida Administrative Weekly.

 

The next item of business was “Public Input” and I had the pleasure of being called upon as the first speaker.

 

I made the following brief statement before the Council:

 

(Quote) “I want to thank you for letting me appear before you and for your holding the meeting here in Northwest Florida.   I’m here today speaking on behalf of Cyber Citizens For Justice and Jan Bergemann, CCFJ President.

I feel that the Ombudsman has proven to be extremely helpful and effective for Condominium Owners and Associations.  I certainly hope this Council will give that office the support, counsel and assistance it needs in the future.   His record of having a 75% rate of solving problems or satisfying the person’s question is, to me, extremely remarkable.  Now that the Legislature has finally approved funding for the office, I look forward to an even greater record of accomplishments in the future.

 

           The lack of proper education of owners and officers and board members appears to be a major problem that generates complaints and questions.   To me the fiscal note that Department of Business and Professional Regulations used in HB1229 relative to the cost of education is extremely excessive and I’m confident there are better ways to provide needed education at a fraction of the costs stated.

 

           Florida has the nation’s best Community College System, and one of the main goals of Community Colleges is to provide education to meet the needs of the residents and businesses of the respective areas.   Let’s get the Community College system to develop a curriculum that can be used at all Community Colleges so classes may be available in the various communities where people may take at will.

 

           Another way is to use the Panhandle Education Consortium in Chipley to provide 24-7 education through computers or by way of the State Transponder.  PAEC now provides training to teachers and administrators on a 24- 7 basis through computers and through broadcasting to receivers at each school and other locations. I assure you the education can be accomplished for a lot less that the DBPR fiscal notations. The lessons could be transmitted into the various Condo conference rooms or the centers at HOA communities.” (End Quote)

 

Sparks asked me to provide him with additional information, as he had already talked with the Community College in Panama City about doing some form of education.   I told him I would get back to him with whatever information he needed.

 

I did not have a list of those who spoke; therefore, I am listing names as I heard them. 

 

Clay Smith:  Smith was concerned with F.S. 718.113(2)(a).  Smith said that no one seems to be able to give us a definition of “material alterations.”  Smith is concerned as to whether or not any of the following can be defined as “material alterations”:  Changing a fence; Changing color of a building; Putting rocks on a weed-grown area to provide more parking.  He said that if you call Tallahassee, you get several different answers.   He suggested using a definition based upon the dollar value of the change, and possibly having included in the documents.  Adams said the law already covers the issue and that Smith may want to include such in his documents.  Smith further stated that his association wanted to buy adjacent property, but with the 100% rule, it’s just about impossible to get anything done.  Adams or one of the other Council members said that the law was changed in 2000 to 75%.

 

Mrs. Ross Pritchett:  She said she manages 28 homeowners’ and condo associations and would like to see F. S. 720 governed by the DBPR.   She said there is presently no recourse.  Rather than having to go to court on each little issue, homeowners would not mind paying the $4 annual fee, just as condo owners do, to fund a system like the condos have.  If under the DBPR, she said that the DBPR could possibly alleviate the problems like “transition” and when actions by boards are outside the covenants.  There was some discussion among Council members as to whether or not there would be less or more controversy should there be more state control.  Mrs. Pritchett said she felt it would require the board members to be better informed.

Pete Dunbar said that in addition to transition and board actions, what else?  He said the DBPR does not do that type of work, because it is handled by arbitration and asked if that was what she wanted.   She replied, “Yes.”

 

John Scott:  He said he had two subjects to discuss.  First is “voting by proxy.” He said the controlling group knows they can change things as they want, because a lot of people do not return their proxy; therefore, their votes do not count.   He said 10% of the people do not return the proxy so now you need about 75% approval.  He said the Florida Condo Law provides lots of provisions relative to proxy voting.   He said it should be based on “those who actually vote and not on the entire membership.”  He discussed an issue where a condo of 100 units was offered $50 million and out of the 100 owners, only 2 did not agree; therefore, they stopped the whole issue. Scott said he thought that to eliminate a condominium, he suggests change the determination from 100% to 80% and if didn’t get the 80%, could go to court to have a judge make a determination.

 

Susan Cox:  She said she is the president of an association in Fort Walton Beach.  She is also CAM for two condo associations and three homeowners’ associations.  She said she is very much against putting changes into state laws as long as there is freedom to place the proposed changes in the local documents.  She would like to see something like a provision requiring “you must live in a unit for six months out of the year in order to run for the board.”  With respect to requirements for education of board members, she noted that there are Community Associations Institute courses available.  With respect to term limits for board members, she said that every association she has been involved with provides for one-year terms.  She said that as far as complaints given to DBPR, she has been involved with two such complaints   She said they responded to DBPR as required and that one of the complaints has been going on for two years and there is still no answer.  The other complaint was taken care of in two months.   The Division of Florida Land Sales, Condominiums and Mobile Homes may tell an owner he doesn’t have a case, but they failed to notify the association the same thing.  She said in Fort Walton Beach she has been in contact with the Division and with the Ombudsman.   They have received no response from Dr. Rizzo as to whether or not he will attend the meeting.  He had asked that they furnish him with all the various records, but still no response for attending the meeting.  Associations should be advised of all complaints filed and all determinations.

 

Frank Taylor:   He is real estate manager with Coldwell Banker.  He stated that the legislation that did not get passed (he was referring to 1229) had six or seven items in it that gave no consideration to time-share investments and owners.   There was no consideration that association boards cannot foreclose on anyone for less than $2,500.   He pointed out that most time-shares range from $360 to $560 annual maintenance fees so it would take years before action could be brought.   He said time-shares do not get people willing to serve on boards, because they are not onsite most of the time.  He said that 1229 was the most atrocious piece of legislation and that it would destroy the time-share business.  He urged the Council to take action on this type of legislation.  His e-mail address:  greg.taylor@email-1.com.

(Note:   From the moment he started talking, I had the opinion that he had been coached what to say and how to phrase his statements.)

 

Ron Brady:  Brady said that Brand Lagoon was an apartment building and then converted to a condo.   Before the developer turns over a property, there needs to be full set of rules and completed architectural designs and plans.   With respect to education, Brady said it would not be hard to set up education online, because almost everyone has computers and for those that do not, videos could be provided.   Speaking about insurance, Brady said that every condominium owner needs to have insurance.   Dunbar asked her if the association had an attorney.  Brady was not quite sure because she was new. 

 

Jay Carlisle:  He said that his condo needed insurance.  However, the company quoted them on the entire value of the structure and the developer’s profits, when all they wanted was insurance on the shell because each owner had insurance for his own unit.

 

Don Jordan:  He asked that all documents handed out by the Council or produced by the Council or state contain e-mail addresses, Web site info, press releases, etc.

 

Jack Willie:  He said he is president of an association on the west end of Panama City Beach.  He urged that the Council be very careful on suggestions for term limits, because his organization has problems getting people willing to serve.

 

DISCUSSION OF EDUCATIONAL REQUIREMENTS

 

Although this was not an agenda item, it was brought up as a special issue.

 

I think it was Adams who said, “It would be great if could require all to have education, but we’d lose about half the people.”   He said Community Associations Institute has a lot of literature, tapes, etc. and a person does not have to go to college to be a board member.  He said the CAI course is voluntary and is paid by the state.  He said that because 1229 included mandatory education, the Council voted to oppose it and that the Council will be looking at all of the issues.  He said people could buy the CAI courses and study them on their own time.

 

One lady stood and said that she had attended the classes three separate times and found them to be excellent.   She praised Mr. Neuman as being very qualified and said he does a great job teaching the classes.  (Neuman had conducted a class just prior to the Council meeting.)

 

Bart Kennedy, who is located on the west end of Panama City Beach, said he has attended two of the classes and found them to be very worthwhile.

 

J. L. Franklin of Sandestin Resorts also said classes were good.

 

Cox said she agreed that the CIA classes were good, but that in Destin they are held at 9 AM during the week and people who work have a very hard time arranging to attend.

 

Judy Honey of Panama City referred to “Condominium, Concept” by Pete Dunbar.  She said that her association is in a quandary about reserve funding.   The condo is 20 years old and thinks the reserve needs to be increased.  The bill filed would have prohibited waiver of reserves. There was a suggestion from someone on the Council that perhaps individual owners could set aside some private funds to cover their own reserve requirements.

 

BUSINESS MEETING

 

Adams stated that now that the public had been heard from, they would begin the business meeting and all were invited to stay if they wished.

 

He called for approval of minutes of the March 31, 2005 meeting.   Dunbar moved they be approved.  There was a second.   Without objection the minutes were approved.

 

Kara Collins-Gomez, OPPAGA Staff Director, was asked to give her presentation on the report issued by her agency.   (Report No.05-xx, March 2005, “Condominium Program Should Process Complaints, Disputes Sooner and Enhance Program Services”)

 

It was confirmed that the report covered data for fiscal year July 2003 through June 2004.   Collins-Gomez said the Division is required to take action on a complaint in 90 days, but state law does not have a time limit for arbitration.

 

When asked if they looked into declaratory questions, she replied that they did not.

 

When asked if she looked at what was going on in the community and if she looked at the Ombudsman to see if his procedures covered some of the issues, Collins-Gomez replied she did not because the Ombudsman Office had not been in operation during the period covered by the report.  Condominium Ombudsman was appointed by Governor Jeb Bush in December 2004.

 

Collins-Gomez said that the legislature needs to state clearly that they want cases closed in 90 days, if that is what they mean.  Need to be specific in what is meant by “case closure” or “case action.”  It was brought up that according to the report, if math is worked out, there are some 50 cases for each investigator within the Department of Business and Professional Regulations’ Division of Florida Land Sales, Condominiums and Mobile Homes.

 

When asked whether or not she would have information on the effectiveness of the Ombudsman Office in the next report, she said that if the Council or a legislative committee suggested such, then they could have that info.  She stated that if there are highly developing issues, OPPAGA needs to know that. 

 

Adams said that -- without objections -- he was going to go out of order on the agenda and hear from Colleen Donahue, Administrative Assistant to the Ombudsman.  Donahue said she is an attorney and she is Dr. Virgil Rizzo’s administrative assistant.   She works out of the Tallahassee Ombudsman Office.  For the time being, Rizzo is working out of the south Florida office, using volunteers to assist.  Donahue said that from January through March 2005 there had been 3,500 inquiries and that they had recruited volunteers to assist them.   75% of the inquiries have been successfully handled.   She said they try to have someone call back in 24 hours on all calls.

 

Dunbar asked if the inquiries have to be in writing.  She said some are, but many are simply telephone calls with questions seeking information.

 

Next questions and comments dealt with the “Condominium Ombudsman Quarterly Report For January Through March 2005,” published May 9, 2005.

 

Dunbar asked if the Ombudsman was governed by the Administrative Procedure Act, Chapter 120, Florida Statutes.  He said he had a basic concern that there is some due process here and he doesn’t think the process is in place.

 

Andrew wanted to know the difference between an inquiry and a complaint.   He said that they need to be broken down for clarity.

 

Adams said they need to know what type of data the Ombudsman Office is getting and that it should be broken down by category and also what information and data is being given out.

 

Referring to Page 5 – Elections:  Andrew said he has very big concerns of focusing on quick rather than quality information.

 

Cochran said that he is concerned that the Division was never contacted nor solicited about information in the report.   The first they knew about it was from the news media.  He wanted to know if supporting data is available for the findings in the report.  Donahue said Cochran could make a request to the Tallahassee office and she was sure the information would be available.   Cochran asked that on Page 4 of the report citing “…some CAMS…,” is there back-up information on this issue?

 

Cochran also said on Page 5, first paragraph, talking about “Some association managers and attorneys…” there should be data with some number on it to back up such a statement.

Also on Page 6 in the middle of the page “…several coalition groups…” he would like to have the backup information substantiating the education bidding.  

On Page 7, it says, “Division provides Rules, etc….”  Cochran wanted to know if there is some analysis or opinions or is it the Ombudsman’s personal opinion?

 

Geisler wanted to know where the Ombudsman developed his information – did he visit or phone to get the info, or is it based upon his personal opinions?

 

Adams read a letter from Dr. Rizzo submitted to the Council.   Adams said to him the letter showed a disrespectful approach to working with the Council.  He said that the Ombudsman is to make recommendations to the Council and not the other way around.   Adams also said he would like a list of all volunteers and where the statutes gives permission for appointing volunteers and what training the volunteers received.

 

Adams said that on Page 4 there is a “…simple problem of mismanagement...”. He asked what steps were taken on the informational letter.    

 

Adams also stated that there were published rules relating to elections and monitoring procedures.  He said the Ombudsman has some concern with these rules and that on May 23 there will be a meeting on the rules.

 

Sparks asked that out of the 3,500 calls, how many were from North Florida?   Donahue said she would have to check and would get the information.   Sparks also asked if the Ombudsman Office found the CAI education to be ineffective.   He said the state is spending $500,000 annually on CAI education and that we need to know if it is effective or not.

 

Andrew said that he has a lot of concerns about the Ombudsman Office.

 

Dunbar said he thought the letter was not accurate, and implies that the Ombudsman does not fully understand our activities and that we would like to have him join us so he can understand and so we can have a face-to-face meeting. 

 

Adams said that Rizzo has been invited, but he has not replied.  Adams said he would write a letter to the Ombudsman outlining the Council members’ concerns and would ask Rizzo to attend the next meeting of the Council.

 

There was discussion as to where to hold the next meeting.   At first Broward was recommended.  However, some said that many people in Broward may be up north during that period of time and maybe Jacksonville would be a good place to meet.  It finally came around to the fact that since Rep. Robaina had requested a south Florida meeting, that it would be scheduled for Miami-Dade County during the third or fourth week of June.  A motion was made to hold such a meeting and the motion carried.  Adams will coordinate with the Department, Rep. Robaina and others for the best date and place.

 

Adams then referred back to the agenda and called on Dunbar to give a report on the 2005 legislation.  He said it would be best to talk about the legislation that passed and not those that failed.

 

Dunbar said only one bill passed, House Bill 219. He questioned when does the industry interface with 578 if the Governor signs the legislation?  He said to bring a 558 claim would have to have an architect.   He questions meaning of structural issues.  He said he e-mailed around the summary of 281 that makes two changes regarding F.S. 718.

He said that legislation passed requires one single season insurance deductible. Also, there is provision for extending the statutory mediation policy.

 

Dunbar said there were several provisions in the appropriations bill.  (I’ll have to get the particulars, as I did not get all particulars on his report.   I’ll ask him to send me information.)

Andrew said that Marriott Time Shares have asked the Governor to veto CS/SB 1520 because the way it treats “travel clubs” in deference to “time shares.”

There was further discussion of 1520 and it finally resulted in Adams being asked to write to the Governor to urge him to veto the bill.  It was suggested that perhaps the Ombudsman would do the same.   Andrew abstained from voting because of a possible conflict.

 

A discussion was held on the Election and Monitoring Rules.  Said there needs to be a definition of the Ombudsman’s powers for appointing monitors and that the proposed rules should be submitted with the next agenda.

 

Cochran said there needed to be a sufficient time frame to allow the monitor to do his job. The question was asked:  “What are the disagreements between the Division and the Ombudsman?" Cochran said  “that the Division has had no discussions with him.   We gave him a personal copy of the proposed rules and I’ve had no discussion with him.” 

 

Need to know what is meant by “All Cost.”  What are the costs?   Who is qualified to be a monitor?  What types of fees are charged?   If it’s a public monitor, what is the salary, per diem, etc?   We’ve had no discussions on this. It should be remembered that with private monitors all is negotiated.

Who is supposed to appoint monitors or select qualified monitors?

 

Andrew said that the Ombudsman Office needs to give its recommendations to the legislature and its report to the Advisory Council on Condominiums.

Geisler said he thinks the Council needs to have a copy of that report.

He said we should have the report ready in the fall.  We should generate a written report to the administration and the legislature.

 

Dunbar said he thinks the Council should get the results of the testimony the Council receives at public meeting and write a report on the findings provided to the Council by the public.

It was recommended that the report should be ready by December 1, 2005.

He also said that in addition to the public testimony received, the Council should also make its recommendations known in the report.

 

Dunbar said that we all need data.   When the Division has an investigation, should notify the Ombudsman and let him handle the monitor for the issue.  There should be clear divisions of responsibilities between the Division and the Ombudsman.

 

Adams said through the press and e-mails, the OPPAGA report was held out to be a “smoking gun.”  He said it was no smoking gun at all.   He said he would like to see a business plan in place.  He thinks that lack of oversight of Ombudsman Office and how the office is run can cause problems.   He said there is overlapping between Ombudsman Office and the Division.   Responsibilities should be clarified.

 

Adams said that there needs to be a structural process guiding the Ombudsman and the Division. He said he was not sure whether the Administrative Procedure Act  (F.S. Chapter 120) governs this or not.

 

Dunbar wanted to know if the Council can go off on its own  --  or does the Advisory Council on Condominiums have to take testimony from the public and then act and make recommendations based on the testimony?

 

Legislative Recommendations 

 

It was brought up that there are people who cannot receive certified mail because of lack of a permanent address.   Many people work and do not get certified mail and the cost for such is a big issue.

 

Gottlieb said that if there is an amendment to the density document, she thinks it should be notified by certified mail.

 

With reference to Financial Reporting, there is the recommendation to prohibit waiver of financial reporting.

 

Under Recommendations:

Dunbar said many people have not even seen an adjuster.  Wants to know what is meant by "there is a mandatory request to hire an architect" (which came from Senator Campbell). Adams said he will write a letter to Senator Campbell on the issue.

Dunbar said he thinks there has been created a third category of assessments.  He said they couldn’t use these reserves and would have to provide for more.

Andrew wanted to know what happens to lien-holders. 

 

On Pages 4 to 10, “No action shall be taken or resolutions made…”  Who gives contract to,  etc?

Dunbar said this is very premature, especially for small condominiums.

 

There was a recommendation to eliminate the right to opt out of the statutes if you have a duplex or some small facility.

 

Dunbar said he likes #9 on Page 5 of 10: 

 

Adams asked if he should write a response to the information submitted by the Ombudsman.  The vote was not to respond.

 

It was pointed out that if the Ombudsman is giving advice, then the recommendation for providing immunity probably needs to be in place.  (See Page 10 of Legislative Recommendations.)

 

At the end there was discussion concerning the Web page operated by Mark Benson.  Adams said that if you use Google search engine and type “Advisory Council on Condominiums,” you go directly to Mark Benson’s website first.

 

It was suggested that Benson be contacted and asked to take down his website until the Council has a chance to talk with him.


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