Posted August 14, 2005
The Office of the Condominium Ombudsman, which was created under Florida Statutes s. 718.5011 by the 2004 Legislature, continued throughout its second quarter to be successful in carrying out its legislative mandate. The Office continued to provide education and assistance to condominium owners, act as a liaison, resolve complaints and oversee elections and meetings.
By definition an "ombudsman" is one who conducts objective fact-finding about complaints, recommends solutions and helps to achieve equitable settlements. The statutory powers and duties of the Office of the Condominium Ombudsman allow it to effectively receive, evaluate and informally resolve disputes arising out of all aspects of condominium operation.
During the second quarter of 2005 the Office of the Condominium Ombudsman continued to focus its efforts on achieving rapid equitable settlements of condominium problems before they escalated into formal complaints and disputes. The best methods and procedures for the resolution of the issues became more apparent from the culmination of six months' worth of experience and information gleaned and marshaled during that period.
The Office continues to be a tremendous success by resolving over 80% of the complaints and issues that it receives. Its success is achieved by improving its
Response-Intervention-Resolution procedure. The improved procedure, however, required the staff to work late into the evening, make more telephone calls, and spend more manpower hours to achieve the desired goal of resolving complaints within 48 hours of their receipt. The success of the Office has also been enhanced by the innovative networking capability of the staff. By working in conjunction with other agencies and resources, the Office has been able to effectuate solutions regarding most all aspects of condominium living. Some of those other agencies and resources are the Office of Human Relations; Fair Housing; Florida Real Estate Commission (FREC); Federal Emergency Management Agency; the Division of Condominium's Bureau of Compliance; Florida Department of Financial Services; the Attorney General's Office; members of the Florida Senate and House; unit owners; board members; community association managers; contractors; and more. The resolution success rate of the Office has been effectively increased by a networking approach.
The Office coordinated with the Department of Business and Professional Regulation's Division of Florida Land Sales, Condominiums, and Mobile Homes (Division) on Division cases that have been brought to the attention of the Ombudsman. The Office of the Condominium Ombudsman with the cooperation of the field workers of the Division has been able to resolve these cases expeditiously with its rapid response procedure. Hopefully, this is the beginning of an effective interplay between the offices that will not only help to alleviate the Division's problematic system but also will allow the Ombudsman to rapidly achieve results. The Division is still unable to effectively enforce and ensure compliance with the law related to the management of residential condominium units. It is anticipated that the Division will continue to corroborate with the Office of the Condominium Ombudsman to avoid any dichotomy between the offices. The Deputy Secretary of the Department of Business and Professional Regulation (DBPR) has recently recognized the potential success of the synergy and interplay between the offices and has suggested that a plan be formulated toward our common objectives. The Ombudsman is looking forward to a long-awaited commitment from the Division.
During the 2005 legislative session the Legislature authorized expenditures of approximately $440,000 from the Division of Florida Land Sales, Condominiums, and Mobile Homes Trust Fund and authorized six full-time employees for the Office of the Condominium Ombudsman, effective July 1, 2005. The Ombudsman, an attorney, two paralegals, an administrative assistant, and a clerk typist will fill the positions.
During the first quarter of 2005 the Ombudsman, an administrative assistant, and several volunteers staffed the Office. Two of the exceptional volunteers have moved into full-time employment positions. The former full-time administrative assistant is also a member of the Florida Bar and has staffed the Tallahassee Office. She moved into the position of full-time attorney and will share the administrative duties with the new administrative assistant. Besides coordinating the operation of the Office's administrative affairs, the Office's attorney will interact with the Division of Florida Land Sales, Condominiums, and Mobile Homes for access and use of their files and records, pursuant to Florida Statutes s. 718.5012(1). She will work with the Ombudsman and the paralegals to rewrite the Florida Administrative Rules pertaining to condominiums and create concise files on each serious condominium issue that the Office frequently encounters. Problem issues which show conflicting, indecisive, or inequitable disposition will be flagged for presentation to the Governor, the DBPR, the Division, the Advisory Council on Condominiums, the President of the Senate, and the Speaker of the House of Representatives with recommendations that may be appropriate for Florida legislation.
A satellite Office will be opened in Broward County.
Governor Jeb Bush recently authorized the Ombudsman to open a satellite office in southeast Florida for the Ombudsman to more expeditiously and personally handle the inquiries that come from Broward, Palm Beach, and Miami-Dade counties. The DBPR has offered to lease a part of its facility in Fort Lauderdale for the Ombudsman and his staff. The Fort Lauderdale office will provide a much-needed public presence in southeast Florida. Although 80% of the inquiries that the Ombudsman encounters are in the South Florida tri-county area, other counties such as Pinellas and Sarasota have also recognized that the Ombudsman is available for assistance. Unfortunately, many persons in other areas do not know that there is an ombudsman available to offer support to condominium owners. This is anticipated to change with the implementation of a statewide awareness campaign in the near future. The presence of a southeast Florida satellite Office of the Condominium Ombudsman is being heralded as the beginning of a resource for a solution to condominium owners' problems.
Despite the seasonal northerly migration of residents, the Office continues to receive calls, mail and e-mails from numerous condominium owners. Approximately 4,000 inquiries were received from April through June 2005. Most of the inquiries and requests were dealt with by telephone and e-mail replies. Approximately 80% of the issues, disputes, complaints, and problems were resolved within a few days of their receipt.
The complaints and requests received by the Office during the second quarter of 2005 were logged into different categories and subcategories. Most involved requests for information not only regarding statutory and administrative rule interpretation, but also regarding the procedural operation and treatment of condominium corporate issues.
The major problem continues to be the incapability and inability of board members to properly manage the operation of the association, as required by statute, articles of incorporation, declaration, bylaws, and rules and regulations.
About fifty percent (50%)
of inquiries were related to Mismanagement of the association by the board of directors regarding finances, general operation, maintenance, and assessments. Twenty-five percent
(25%) of the complaints were related to Officer and Director Abuse by selective rule enforcement, lease-sale-transfer refusal, and general harassment at board meetings and about record requests. Ten percent
(10%) were complaints regarding similar Abuse By Community Association Managers (CAMs) and condominium management
companies. Fifteen percent (15%) of the complaints related to Election and Recall situations and issues.
SUMMARY OF MAJOR CATEGORIES OF INQUIRIES AND COMPLAINTS
BOARD MISMANAGEMENT (General and Fiscal)
OFFICER AND DIRECTOR ABUSE (Harassment, Rules, Records) ..........25%
ELECTION PROBLEMS AND RECALL
MANAGER (CAM) AND MANAGEMENT COMPANY ABUSE
Mismanagement of the association by the board of directors regarding finances, assessments, general operation, and maintenance currently ranks as the most serious problem that condominiums encounter. Many directors lack the knowledge to effectively and successfully operate a corporation of residential units. They fail to realize that they must employ the specialized knowledge of experts regarding problems that they face so as to avoid unwanted consequences that lead to unit owner dissatisfaction. Their fiduciary obligation requires them not to deviate from a prudent and reasonable operation of the corporation. Although often evaluating the dilemma too late to prevent difficulties, the Office assists these associations (boards and members) in an effort to ameliorate their problems by facilitating their access to information and resources through personal meetings, phone calls, e-mails, and letters. A more general approach needs to be tailored and refined to educate and instruct board members regarding the handling of all management situations.
Officer and Director Abuse is the second most serious issue that condominium owners face. Directors often make unreasonable rules and regulations that impose impossible lifestyle restrictions on unit owners, restrictions not envisioned by the unit owners when they purchased their condominium units. Abuse and harassment of unit owners by directors frequently occurs at meetings where owners are intimidated, abused and slandered when they wish to speak. Vindictively, owners are not permitted access to official records despite a legitimate statutory request. Directors use and abuse their positions by selectively filing liens and foreclosures, selectively enforcing the documents and rules against owners, by imposing fines and fees, and by refusing to approve the sale or lease of a unit. The abusive conduct is used as protectionism and a method of defense from exposure of some wrongful or bad act committed by that director. Some association directors employ these methods to maintain management control of the association so that they may hold and exert dominance over other unit owners, dictate the award of business contracts, control meeting agendas and budget allocations, and levy assessments. There is no legally recognized action a unit owner can pursue to prevent harassment and abuse. Officer and director abuse is a serious problem that perhaps may only be rectified by legislative intervention.
With the assistance of legal counsel, some board members seek to defy and obstruct the Ombudsman's proposals regarding solutions that would prevent abuse. Acting under the direction of a board member, the association's attorney aids and abets that board member and violates his own legal obligation to the corporation. Often the attorney's recommendations are not in the association's best interest and are contrary to the interest of the majority of the members. These attorneys fail to recognize that they are placing themselves in the unethical conflict of interest situation, as stated in Rule 4-1.13 of the Rules Regulating the Florida Bar. The attorney's duty and responsibility are not to the board members but to all of the members of the association. The lawyer is required to proceed in the best interest of the corporation or face sanctions from the Florida Bar. Conduct by board members to protect their personal interests at the expense of the association and to prevent the Ombudsman from resolving simple problems is a breach of their fiduciary duties. Association legal counsel must recognize the obstructive ploy and refrain from being a facilitator of this conduct. The attorneys should recognize their roles as corporate representatives and avoid an ethical violation when acting on behalf of certain members of the board of directors against the desires of the members of the corporation whom they are retained to represent.
The directors must realize that their ultimate objectives in the management of their associations are to comply with statutory guidelines, to maintain an environment that serves the best interests of the residents' health, safety, and well being, and to promote a more cohesive unit of common ownership. Directors must affirmatively act to satisfy their constituency and to prevent unrest and polarization of their community.
The Election Monitoring section of the Office of the Condominium Ombudsman continues to be a very effective method to insure fair and impartial condominium elections. The wisdom and purpose behind the legislation that created the election monitor and monitoring process are achieving the desired purpose. Unit owners' participation in their election process has increased. Because of the State's presence at elections, many unit owners are now no longer afraid to come forward and become candidates for their boards. They feel that they now have a fair chance in that their election under the supervision of the election monitor and the State will be in most aspects fraud free. The procedures instituted by the Ombudsman have been very effective in providing fair and impartial elections.
Serious attempts to thwart the election monitoring process have been employed by some directors so that they may maintain their stranglehold on association management. Some board members employ and misuse the association's assets to prevent an impartial and fair election. They employ attorneys to find reasons to prevent the appointment of an election monitor and they attempt to delay, postpone or even cancel the election. Association legal counsel must recognize their own role as corporate representative and avoid manipulation by certain board members who wish to disrupt and impugn the election process.
The Education Section of the Office of the Condominium Ombudsman is in the process of creating three methods of educating unit owners:
Frequently Asked Question (FAQ) Web page at
E-learning course with the cooperation of Broward Community
Onsite seminar presentations by the
(1) The FAQ Web pages will readily allow everyone with Internet access to view a resource of information regarding their condominium issues. This approach is designed to establish and implement a quick and easy system that will provide "the largest possible audience" with education and reference materials. It will be based on the questions and inquiries that the Office receives. It is anticipated that this Web page will ease the number of calls and e-mails the Office encounters.
(2) The E-learning course is a more extensive and comprehensive educational source. It is a basic education course regarding the usual issues condominium directors and owners encounter in the daily operation of their associations. Its curriculum and unique approach will be directed and oriented toward issues regarding the administration and operation of a condominium. It too will reach statewide via the internet.
(3) Onsite seminar presentations by the Ombudsman will be conducted periodically.
These educational tools require some basic funding, which the Ombudsman expected would be available from the $500,000 condominium education budget from the Division Trust Fund that was recently approved by Governor Jeb Bush. The Ombudsman is required by statute to "coordinate and assist in the preparation and adoption of educational material." Created under Florida Statutes s. 718.50151, the Advisory Council on Condominiums is also required to make recommendations regarding the education programs offered by the Division. However, the Department of Business and Professional Regulation (DBPR) furtively renewed last year's contract with the Community Associations Institute (CAI), an out-of-state corporation. The total $500,000 was awarded to CAI by the DBPR on June 6, 2005 -- without even attempting to discuss the needs of the Ombudsman to carry out his education program and without seeking the recommendations of the Advisory Council on Condominiums. This is a major setback in the development of the Ombudsman's mandated education program.
Condominium Administrative Rule change is recommended by the Office of the Ombudsman to resolve many condominium association problems and issues. The Office of the Condominium Ombudsman is required by Florida Statutes s. 718.5012(3) to make recommendations appropriate for legislation relative to Division procedures, rules, jurisdiction, personnel, and functions. Rule change would solve many of the complaint and inquiry issues that have been presented to the Office and, consequently, would resolve many procedural problems that associations encounter. The Advisory Council on Condominiums has also recognized that "Rule" improvement may effectively resolve many condominium issues. The Ombudsman's staff looks forward to preparing suggested rule improvement with the assistance and coordination of the Division and the Advisory Council on Condominiums. The Division must implement suggested changes to keep up with the evolving condominium community development throughout the State of Florida.
The Ombudsman believes that serious administrative rule changes will relieve the legislature and administration of the burden of attempting to resolve constituent and resident issues by statute or order.
The Office of the Ombudsman is evolving into a truly successful liaison between the condominium owners of the State of Florida and their government.