Article Courtesy of The Miami Herald
By Brenda Medina
Published February 8, 2017
The Florida state agency that regulates condominium
associations does not work to protect the tens of thousands who live in
condos, resulting in extensive fraud, mismanagement and conflicts of
interest among the boards and management companies that govern them,
according to a Miami-Dade grand jury report issued Monday.
[Department of Business and Professional Regulation, or DBPR]
seems ill-suited to resolve, correct or prevent many of the
recurring problems that have been brought to their
attention,” the GRAND
JURY REPORT said.
The report came nearly a year after El Nuevo Herald and
Univision 23 launched an investigation that revealed many
cases of electoral fraud and forgery, conflicts of interest,
mismanagement, and rigged bidding systems among many condo
associations in South Florida.
The grand jury report makes it clear the Florida Department
of Business and Professional Regulation “is not effective
and doesn’t protect condominium owners from fraud and
mismanagement,” Miami-Dade State Attorney Katherine
Fernandez Rundle said Monday.
“This makes condo owners even more vulnerable to
manipulations and in some cases leads to the loss of their
report echoed the complaints of dozens of condo owners, from
working-class families in Little Havanato affluent families
in Key Biscayne, documented by the reporting of El Nuevo
Herald and Univision 23.
Condo residents protest in the city of Doral on April
The report noted a special committee of the Florida House of Representatives
published similar findings in 2008. “Sadly, nine years later, this jury has
listened to testimony from condominium owners similar to the complaints”
gathered by the lawmakers back then.
“Unfortunately and almost irrationally, some of the problems seem to have
gotten worse,” the report said.
The findings come amid a condo building boom across the state. There are an
estimated 1.6 million condos in Florida today — nearly 300,000 more than in
2007 — and 38 percent of them are in Miami-Dade and Broward counties.
Despite this building boom, the state government did not assign additional
investigators to look into the thousands of complaints received each year by
the DBPR, according to the grand jury. The agency has only 33 investigators
statewide for condo issues, and only 12 work in Miami-Dade.
Florida has more than 20,000 licensed condo association managers and more
than 2,000 management companies. By contrast, the Division of Regulation
within the state agency has only 53 investigators, who regulate all licensed
professionals statewide, including thousands not related to condos.
Stephen Lawson, a spokesperson with the agency, said they are reviewing the
grand jury report.
“The department takes very seriously its statutory obligations regarding the
enforcement of condominiums,” Lawson wrote in an email Monday to the Nuevo
The report notes the grand jury heard from DBPR employees, but added their
testimony was “guarded and strained” and the witnesses appeared with lawyers
assigned by the state. In fact, the agency’s general counsel “actually
challenged our jurisdiction and authority to conduct this investigation,’’
the report said.
“Unlike other public officers and officials who appeared voluntarily, to
obtain the appearance of two DBPR investigators we were required to issue
subpoenas,” the report noted.
The grand jury also reported that the DBPR’s “failure to demand that its
investigators utilize, or comprehend basic investigative techniques is
breathtaking.” One of the investigators who testified repeatedly said he did
not know basic information and needed to consult with his supervisor.
Grand jury members said they were shocked to learn that condominium laws and
regulations do not include clear definitions of ethical principles as basic
as conflict of interests.
The grand jury issued a series of recommendations for changes in state laws
to correct some of the principal issues: open access to condo association
records; conflicts of interests among members of association boards; fraud
in board elections; the powers of election monitors; and the
responsibilities of the DBPR.
Also recommended were criminal punishments for condo board members and
licensed administrators who act “in bad faith” for their personal profit or
are involved in fraudulent activities. And the report noted that the results
of condo elections of board members should be nullified if there’s clear
evidence of electoral fraud.
State lawmakers from Miami-Dade who are drafting a law to updating current
condo statutes said they are reviewing the grand jury report.
“This report is very revealing and is going to be extremely helpful to the
Legislature as we figure out how to fix this very important issue,’’ said
State Rep. J José Félix Díaz, a Republican who represents a district that
goes from Doral to Kendall and includes Fontainebleau, a neighborhood with
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COMPLETE GRAND JURY REPORT