HIDDEN TRAPS IN CONDO AND HOA CONSTRUCTION PROJECTS

An Opinion By Cristian Murray + Eugenia Anderson

Published October 14, 2025

When a condominium or HOA undertakes a major project — such as a 40-year recertification, hurricane-impact window replacement, concrete restoration, or other large renovation — owners often assume the process is necessary, transparent, and well-managed. Unfortunately, many of these projects become fertile ground for overcharging, hidden kickbacks, and poor oversight that quickly drain association funds.

How Problems Begin

Many construction scams start subtly. A contractor may submit a low bid to win approval, only to inflate costs later through a series of vague and overpriced change orders. What begins as a $500,000 project can quickly balloon into $2 million — leaving owners paying for work they never agreed to or that may not have been needed.

Sometimes, the manipulation starts even earlier. Engineering reports may exaggerate structural damage, label functioning systems as “unsafe,” or recommend full replacements where minor repairs would suffice. These inflated reports are often used to justify large expenditures and steer contracts toward preferred vendors.

How Boards and Managers Can Unknowingly Enable Fraud

Even well-meaning boards can inadvertently open the door to abuse. Common pitfalls include rushing into “emergency” contracts without competitive bids, relying on a single consultant’s opinion, or failing to maintain proper documentation and oversight, or simply not knowing the industry protocols of how to properly administer and manage larger scale construction projects.

Management companies can also contribute to the problem — by making unilateral decisions without board authorization, hiring their “preferred contractors,” delaying financial reconciliations, or withholding key records. Such lapses create opportunities for misuse or diversion of funds.

The Legal Framework Owners Should Know

Florida law provides strong protections for owners seeking transparency:

• FS 718.111(12): Grants every condo owner the right to inspect and obtain copies of contracts, bids, invoices, and other official records.

• FS 718.3026: Requires competitive bidding for certain large contracts to ensure fairness and accountability.

Understanding these statutes gives owners a legal foundation to demand transparency and challenge improper or rushed decisions.

Common Red Flags

Be alert for these warning signs that a project may be heading off track:

• Multiple or unusually large change orders with vague explanations.

• Sudden vendor changes or “emergency” approvals without competitive bids.

• Delays or resistance when requesting access to contracts, bids, or invoices.

• Projects labeled “life-safety” without documentation in milestone or SIRS reports.

• Budgets that rely on round numbers or vague categories instead of detailed line items, specified measurements and costs.

If any of these appear, start asking questions immediately — early intervention is far less costly than special assessments or potential litigation.

How Owners Can Protect Themselves

Owners can play a decisive role in preventing abuse. Here’s how:

• Scrutinize the engineering scope of work. Ensure that line items are not duplicated or disguised under different descriptions.

• Verify all measurements. Engineering reports often overstate building quantities — for example, listing 20,000 linear feet of balcony railings when only 10,000 exist, or 100,000 square feet of glass when the true number is 60,000. Independent re-measurement can reveal overcharges worth hundreds of thousands of dollars.

• Engage an independent third-party engineer to review the scope, quantities, and reasonableness of the proposed work.

• Request all records in writing and keep a dated paper trail of correspondence.

• Compare bids side by side and look for discrepancies in pricing, measurements, or scope.

• Attend and speak up at board and budget meetings — Florida law requires proper notice for most votes.

• Demand accountability from your Owner’s Representative. They should review every invoice for accuracy before payment.

• Require signatures on all invoices from the board, owner’s representative, and Engineer of Record before payment is released.

• Obtain and retain copies of all paid invoices in case disputes or litigation arise later.  Know where, what and when the unit owners must vote for construction projects, material alterations, or architectural changes as stated in your governing documents.”

Final Thoughts

In most cases, financial abuse in construction projects doesn’t happen overnight — it grows from small acts of negligence, unchecked authority, and poor documentation. Owners who remain engaged, informed, and proactive can prevent costly mistakes and help ensure that every dollar spent truly benefits their community.

For more information please go to:

The Costly Schemes Draining Millions from Associations