Bills threaten condo boards' sway

 
Courtesy of the St. Petersburg Times
Published April 9, 2004
By JONI JAMES

TALLAHASSEE - Daniel and Elizabeth Cruz got some disturbing news two years ago when they took their newborn daughter, Megan, home to their Pembroke Pines condominium.

Megan wasn't welcome there.

Between 1998, when the Cruzes bought their condo, and Megan's birth, the condominium association had voted to turn the large complex into a seniors-only community for those 55 and older.

The parents could stay, but Megan had to go.

The condo association board's decision had state law on its side. A costly legal fight loomed.

Now, Florida lawmakers are considering changing state law to give Florida's 1.1-million condo owners a way to challenge rules about pets, rental rights or parking spaces.

Two bills working their way through the Legislature would require condo boards to hold a public hearing on altering rights owners had when they moved in, such as renting their condo seasonally. Owners also could demand a poll of everyone; a right could not be changed unless a majority agreed.

Sellers would be required to provide potential buyers a simplified disclosure form detailing the financial health of the condominium association, including liabilities, such as lawsuits or future assessments.

To avoid lawsuits, the legislation would create a state ombudsman's office that could mitigate complaints between condo owners and their association boards, an idea that has drawn criticism from one of the state's leading condominium lawyers. A $4 annual state fee that condo owners already pay for regulatory oversight would fund the office. Much of that money now funds general state government.

House sponsor Julio Robaina, R-Miami, also wants to create a state advisory council to propose future changes to state law or the ombudsman office.

Robaina said the House could vote on the plan as early as next week. Senate sponsor Rudy Garcia, R-Hialeah, said his bill must get through five committees, unless he can persuade the Senate leadership to move more quickly to a vote by the full Senate.

Other than a lawsuit, state law now offers little alternative to condo owners like the Cruzes in disputes with condo boards.

The Cruzes ultimately prevailed but only after lawyers were called in.

"I wouldn't wish that on anybody," Mrs. Cruz said from her condo last week as 2-year-old Megan played in the background. While their immediate neighbors were supportive, the board of the 1,900-unit complex "was very nasty," she said.

Late last year, tales like the Cruzes' poured out at statewide public hearings, prompting Robaina to propose an ambitious, 25-point plan to overhaul the state's condominium laws.

Unveiled in January, the proposal sparked a firestorm of opposition from condo boards, whose members are chosen by their neighbors to oversee the operations, financing and common interest of the condo complex.

Based on testimony from the hearings, Robaina proposed background checks on board members; bans on immediate family members serving together on condo boards; caps on legal fees associations pay for routine matters; a ban on raising assessments without a majority of owners approving the plan; and a requirement that all services contracts be awarded only after the board solicited three competing bids.

Also recommended: Give the ombudsman the right to conduct surprise visits on condo associations based on a complaint by a condo owner.

One grass roots organization praised the plan.

"The problem you have is that these boards are equipped with lots of power, power enough to foreclose on you," said Jan Bergemann of St. Augustine, founder of Cyber Citizens for Justice, an Internet-based group that claims 2,000 members pushing for greater accountability in homeowner and condo associations. "If the board violates its own rules, it can use the owners' money to defend itself."

Meanwhile Gary Poliakoff of Fort Lauderdale, whose law firm, Becker & Poliakoff, represents more than 4,000 condo associations in the state, led the opposition.

"Those bills deserved to be drowned," Poliakoff said last week.

In early March, Poliakoff wrote his clients: "During the 31-plus years I have been an advocate for the rights of condominium owners ... I have never seen proposed legislation which is more destructive."

Among Poliakoff's complaints was that Robaina's original bill would have prohibited a condo board from approving a special assessment that imposed a financial hardship on any unit owner without a majority vote. "Financial hardship is not even defined in the bill," he wrote.

Poliakoff said, giving an ombudsman the power to conduct surprise inspections would violate privacy because most condo association documents are stored in the condos of board members.

Robaina, a freshman lawmaker, admits he was ambitious. "We went for full bite of the apple. We knew it was a big leap and we expected opposition, but we said it was a work in progress."

The controversy cost Robaina his original Senate sponsor, Republican Evelyn Lynn of Ormond Beach. Garcia took up the cause last week.

"It was extremely controversial when I first read it," Garcia said. "But we still need to look at it. These are cities on their own that really dictate how people live, where they park their car, their security. They dictate their cost of living through assessment fees."

Poliakoff still opposes creating an ombudsman. The Division of Florida Land Sales, Condominiums and Mobile Homes has ample jurisdiction to police condo associations, Poliakoff said. Lawmakers should just provide more funding, he said.

But Bergemann said the bill doesn't go far enough and says condo owners still might need to hire lawyers to fight their condo associations. An ombudsman would be a step in the right direction, he said.

Last week, Garcia told members of the Senate Regulated Industries committee that the legislation is "my "going-home' bill." Afterward, he said he can persuade his Senate colleagues to go along. "The plan initially was too dramatic without substantive studies behind it," Garcia said. "We've taken a lot of the controversial issues out of the bill, we'll study them over summer and come back next year."

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