Legislative report calls for greater condo oversight

Article Courtesy of The Sun Sentinel

By Joe Kollin

Published March 20, 2008


A newly released, bipartisan legislative report could lead to extensive changes in state laws protecting the millions of owners in Florida condo and homeowner association communities.

Recommendations from the House Select Commission on Condominium & Homeowner Association Governance range from requiring local police departments to investigate cases alleging fraud by directors to mandatory education for all condo directors.

Other suggestions include regulating homeowner associations for the first time and providing more money for the Department of Business & Professional Regulation and the state condo ombudsman so they can provide better service.

Also, the commission would forbid associations with revenues of more than $100,000 from waiving outside review of their books for more than two years and would require the state to subpoena books and records of associations that fail to let two separate owners see them on two separate occasions.

The nine-member committee wrote its report after hearing "horror stories" from unit owners in five cities between January and early this month. Its chairman, Rep. Julio Robaina, R- Miami, said lawmakers could turn the recommendations into law during the current legislative session that ends in May.

"It looks good. There's a real will from the leadership in the Florida House to make this happen," Robaina said.

House leaders may combine the committee recommendations with several condo and homeowner association bills that have been filed, he said. Consolidating them into a single measure, a sign lawmakers look favorably on the measures, could come within a week, Robaina said.

Another reason for his optimism: The influential law firms and other professional groups that for years have been saying no changes are needed don't seem to be offering their usual stiff resistance.

Attorney Donna Berger once opposed nearly all attempts to change the law as executive director of the Community Association Leadership Lobby, the lobbying group for Becker & Poliakoff, the state's largest community association law firm. She is now doing the same for the Community Advocacy Network, the lobbying arm of the Katzman & Korr firm.

"All in all, I think it's a decent report," she said. "There are some really helpful suggestions."

Berger said she is "not opposed" to the recommendation to regulate homeowner associations. That proposal was regularly killed by opposition from representatives of boards who don't want the state looking over their shoulders.

Jan Bergemann, president of the Deland-based Cyber Citizens for Justice, has been pushing for years for state regulation of homeowner associations to help protect homeowners from their boards.

"A regulatory agency for homeowners association with strong enforcement powers is needed more than ever," Bergemann said. "With our bad economy, the many foreclosures and unpaid assessments by financially troubled homeowners will cause havoc in our associations if our Legislature fails to come up with fast solutions to stop financial mismanagement, uncontrolled spending and even clear embezzlement in our [condo and homeowner] associations."

Ed Baron, a retired architectural and engineering consultant who owns a condo in Palm Chase Lakes in Boynton Beach, disagrees with some of the proposals.

He said mandatory director training won't change anything because the people who serve aren't always cut out to be "responsible for budgets exceeding a million dollars."

Robaina said three cases pending in Broward courts show the need to train police to recognize condo fraud.

In a Hallandale Beach case, four people were arrested, including a condo president who has pleaded guilty, in the theft of $1.4 million in unit owners' money. In another case, the former president and treasurer of a Davie condo is awaiting trial on charges of taking $759,654 from owners. And the former treasurer of a Hollywood condo is charged with receiving more than $13,000 in health plan coverage.