FLORIDA HOUSE OF REPRESENTATIVES

SELECT COMMITTEE ON CONDOMINIUM &

HOMEOWNERS ASSOCIATION GOVERNANCE

An Opinion And Report By Jan Bergemann 
President, Cyber Citizens For Justice, Inc. 

Published March 2, 2008

Tampa --  More than 200 interested citizens were in attendance in the C.W. Bill Young Hall at the University of South Florida on Saturday, February 23, when Chairman Julio Robaina opened the fourth hearing of the Select Committee on Condominium & Homeowners Association Governance.

From left: Rep. Joe Gibbons, Rep. Franklin Sands, Nathan Bond, Chairman Julio Robaina, Grethel Aguiar, Rep. Luis Garcia

Select Committee members present:  Chairman Rep. Julio Robaino, Rep. Rich Glorioso, Rep. Kevin Ambler, Rep. Joe Gibbons, Rep. Franklin Sands, and Rep. Luis Garcia, Jr.

Also, present CAM Council Member Mark Benson, Staff Director Nathan Bond, Rep. Robaina’s Secretaries Grethel Aguiar and Melissa Medina, Condo Ombudsman Danille Carroll, and Jon Peet from DBPR.

George Staropoli from Arizona (Citizens for Constitutional Local Government) presented views on constitutional issues.

Jerry Koenig, a retired attorney who is a member of the Florida Condo Advisory Council, discussed the very problematic issue of liens and foreclosures.  He implored the committee members to make the necessary changes to FS 718.116 to include safeguards against frivolous liens and foreclosures.  Currently, large attorneys’ fees are added to small amounts of unpaid dues, causing unfair financial damage to owners with low incomes and fixed incomes.  Proposed changes are designed to provide necessary protection. 

for purposes not allowed. Two examples: A $600 bill for food and beverages spent by the board in a restaurant owned by Schecher; and campaign donations paid from association dues, explained by Schecher as “lobbying cost.” 

The fact that Schecher owns the management company doesn't really help to calm down the emotions of the owners who clearly feel railroaded. The committee members made it very clear to Schecher that spending association dues to pay a $600 dinner for the board members and using association dues for “lobbying purposes” are clear violations of Florida statutes.

This condo has a long history of controversy. Among other issues in dispute:  Schecher was accused of using the votes of broom closets and elevators to win the election. The newly filed owner-friendly condo bill HB 995 tries to prevent these kinds of shenanigans

It was remarkable that again many of the "invited" parties didn't show, clearly ignoring the state-appointed Select Committee.  And then board members, community association managers and attorneys wonder why association members get suspicious?  If they fail to comply with the invitations of this legislative committee, then they must be doing something they want to hide.

  
The boards and attorneys complained about having to travel that far from Miami to Tampa . Ever consider that it would have been just a short trip, if they had obeyed the invitation to appear the first time?

         

The panel heard many good reform proposals, from clarifying vague language in the statutes to making necessary changes to protect the owners.   But from the cases that were heard from associations -- "invited" or under subpoena -- it was very obvious that a lot of the problems could be avoided if there were an easy tool to enforce the rules and statutes.    We have seen many association boards, community association managers and their attorneys trying to ignore the "invitations."  If a powerful House committee has problems getting the people in charge to follow the rules, how can an owner expect them to honor a record request by certified mail?        Without enforcement even the best statutes will be ignored!

From left: Franklin Sands, Nathan Bond, Julio Robaina, Grethel Aguiar, Luis Garcia

The panel listened to many presentations from owners and board members, but the main issue was always the same: Differences about the way rules and statutes are interpreted, the lack of enforcement by our government and the total lack of accountability of the people in charge!

Here are a few choice cases we heard:

• Owners from the Nine Island Condominium Association, Inc., in Miami Beach went all the way up to Tampa, only to find out that the board again didn't follow the "invitation" of the House Select Committee. Therefore, a subpoena was issued for the Tallahassee meeting. Owners allege serious financial misconduct, "disappearing" funds (Case #1241/ccsc/#29 filed with Miami Beach Police Department) and misuse of reserve funds. No matter what really happened, the "stonewalling" of the association board and the attempt to avoid full disclosure show that this is just "another case that doesn't pass the smell test."

• An owner of the Island Towers Association, Inc. in Dunedin complained about the lack of enforcement by the DBPR, after the association denied requests to inspect the financial statements. DBPR investigators were biased in favor of the association, took its word as gospel, and just closed the investigation when the investigators were told that monthly statements "don't exist." The owner suggested as well reform proposals to help stop the shenanigans:  Remove the administrative rules that water down the statutes enacted by the legislators and penalize the “person” responsible....not the association. A hefty fine is a great “education.”

• Owners of the Silver Lakes Acres Property Owners Association, Inc. presented in Orlando documents that showed that a voluntary association had been revitalized, but the board claimed it to be mandatory NOW. There were as well accusations of money being paid to board members and owners being sued for non-payment of dues. The president's wife (he couldn't come to the meeting because of health reasons according to his wife) tried to explain to the panel members about all the good things the association is doing. What she obviously didn't understand is the fact that it is a “voluntary association” and even the best of intentions doesn't give the board the right to force owners to pay dues. Detailed explanations from Representative Kevin Ambler and CAM Council Member Mark Benson obviously fell on deaf ears, because according to information I received the president had a "speedy recovery." On Sunday he was able to tell owners that the panel got it all wrong and his "connections" in Tallahassee told him that he is absolutely correct when telling owners that they are obligated to be part of the association and pay dues. 

• Two owners made presentations about former community association manager LeRoy Dunn, who lost his CAM license due to the election shenanigans in Section 20 Property Owners' Association, Inc. (See final arbitration ruling) in Punta Gorda. Now, with the help of the board of directors, he seems to use a similar pattern in the Pembroke Property Owners Association in Lake Suzy. Frivolous lawsuits, heavy increases in annual dues and intimidating owners have taken over the community, where Dunn, after losing his CAM license, works now as "CONSULTANT". To be continued!

Nathan Bond         Julio Robaina,   Grethel Aguiar      Luis Garcia    Kevin Ambler    Mark Benson

• The Division came under heavy fire again by two owners, who found no help with serious complaints against board and management of the Mentone Court Condominium Association, Inc. in Sarasota. The failure of the Division to take any action and complete a full investigation of the facts, the complaining owners had to suffer retaliation and reprisals. In short, the Division needs tools to discipline condominium boards for failure to adhere to statutes.

• An owner of the Deer Creek Golf & Tennis Resort Phase Three-A Homeowners Association, Inc. in Davenport alleged that developer Larry Maxwell still collects HOA dues under the threat of liens and foreclosure from owners, despite the fact that turnover took place many years ago. It seems the developer filed the original deed restrictions naming his for profit company the manager of the HOA "FOREVER" and included the ability to collect fees from all owners "FOREVER." CAM Dewanna Moore, employed by the former developer, collects these dues without giving anybody access to financials. A thorough investigation of these allegations will be necessary!

• Board members of the Lake of the Woods of Jacaranda Homeowners Association, Inc. and the Division came under heavy fire once again in a testimony by owners. Alleged habitual abuse of Civil Rights by board & their attorney and the failure of the Division to act were part of the discussion. A frivolous SLAPP-suit added to the many problems this owner experienced in this community. His suggestion to legislators: Stop the habitual malicious harassment by HOA boards.

• Allegations of misuse of reserve funds, an attempt to re-roof all 116 units using two unlicensed "engineering" reports, filed fraudulent false entries in the Manatee County Court Public Record and a lack of investigation by the Division led to a lawsuit filed by residents of the Lakebridge Condominium Association, Inc. in Bradenton. Owners accused the Division of "dropping the ball" when not acting upon the complaint filed by about 40 owners of the association. The lawsuit contains allegations of theft, fraud, breach of fiduciary duties, numerous violations of Florida Condominium Act and illegal re-roofing. A costly lawsuit could have been avoided if the Division had used due diligence to follow up on the seemingly just complaint.

• Panel members already heard a preview about the complaints owners will raise about the board and CAM Ray McDonald of the Fontainebleau Terrace Owners Association Inc. in Panama City Beach. CAM Ray McDonald was accused of failure to supply financial records to owners in a timely manner, co-mingling of owners accounting and rental program accounting, allowing uninsured and underinsured contractors to work, creating a huge liability for owners, and running the rental program under association owners' ID number. The main complaint, violating owners' rights to peaceful assembly, will be heard in Tallahassee. CAM Ray McDonald, with the help of local police, interrupted an assembly of owners trying to recall the sitting board and removing McDonald from office, leading to the arrest of one of the owners (See: CONDO MANAGER BULLIES HIS WAY INTO "OWNERS ONLY" MEETING). 

• Michael Hickman, 3^rd “successor developer” of the Fisherman's Cove Villas Homeowners Association, Inc.  in Palmetto, was accused of not holding meetings or elections, no notices or minutes available to owners. Owners alleged that the "developer" is co-mingling funds, collects $200 per month fees for no services and restricts homeowners from using recreation facilities for which they were given 55-year lease by initial developer. Owners so far have received no help from county or law enforcement agencies.

• A director of the board of a condominium association complained about the lack of accountability of the people in charge. Since there are no civil penalties for directors who violate the statutes, owners (not directors) are punished for director misconduct.  He suggested holding condominium directors accountable to the same set of standards as Florida City Commissioners. 

• According to owners of the Harbor Hills Homeowners Association, Inc. in Lady Lake, this community is a case study in “How Not To Govern An Association." The developer, who appoints and controls the board of directors, leaves the 475 resident members with absolutely no voice. The fact that financial documents were not supplied in a timely manner -- in one case 190 days late -- was blamed on the complaint of owners.

• Selective enforcement and refusing access to clubhouse facilities was the issue brought to the panel by members of the Homeowners Association of Highland Lakes, Inc. in Palm Harbor. According to these owners, you can only use clubhouse facilities if you're following the "board's party line." Groups that are considered "dissident" can't reserve the clubhouse. Another case of violation of the "peaceful assembly" provision?

• A director of the board of the Third Bayshore Condominium Association, Inc. in Bradenton made serious allegations against community association manager Carl Romano (Sentry Management), who obviously took over the power on the board of directors by dubious means, like posting bogus agendas trying to put himself in the chair of the board meeting. Police had to be called to restore the order to continue the meeting. Among many other complaints the director told the panel about driving all the way to Sentry Management headquarters in Longwood in order to get association documents, only to be told that he had "no appointment." The complainant asked the panel to enforce stricter CAM rules and put an end to power-hungry managers, who talk gullible board members into violating Florida statutes.

• The board of the Otter Key Condo Association, Inc. in St. Petersburg didn't agree to any audit of the financials for the past 23 years, an owner appearing in front of the Committee alleged. Even his offer to pay for the audit in full was ignored. The owner further alleged misuse of reserve and insurance funds and "regular secret meetings" of the board with the CAM . Due to the locked-door policy, emergency personnel couldn't respond in a timely manner when complainant suffered a heart attack. His suggestion to the panel: Finally enact term limits, since elections are easily rigged!

the system will continue to fail the owners. We need real reforms, not more band-aids that will not stop abuse, financial mismanagement, uncontrolled spending, and even clear embezzlement in our associations."

Representative Rich Glorioso hit the nail right on the head in an interview with Channel 8 (Tampa) "It's criminal, it almost appears as if white collar crime has taken over our homeowners' and condo associations! The problem is that nobody is enforcing it."