The state of Florida
collected $13.7 million in fees in 2020 from condominium
owners associations, vacation timeshares and mobile home
parks.
But instead of using that money for its intended purpose —
including training condo associations about things like
maintenance — the Florida Legislature swept $5 million of it
into the state's general fund.
It's a pattern that's been going on for years, records show.
In the wake of the collapse of the Surfside condominium in
South Florida, some legislators believe it's a practice that
needs to stop.
"I'm pretty sure this (sweeping the Division of Florida
Condos trust fund) is something that will be discussed in
the next Legislative session," said state Sen. Tom Wright,
R-New Smyrna Beach.
The state's Division of Florida Condominiums, Timeshares and
Mobile Homes Trust Fund is supposed to be used to
investigate complaints lodged by condo owners as well as
educating condo association board members on their
responsibilities as stewards of their buildings.
Diverting some of those fees collected into the state's
general fund is something the state Legislature does every
year.
WHERE DOES IT GO?
Each year, lawmakers grab about two out
of every $5 collected for condo enforcement for other uses
The Legislature has siphoned off $65 million — nearly 40% of
the $167 million raised by those condo association fees
since 2008. That's the same year state lawmakers took away
much of the division’s compliance and enforcement powers.
"For years, we've said please don't sweep that fund," said
Travis Moore, a St. Petersburg-based lobbyist for the
Community Associations Institutes which represents condo
owners associations throughout Florida. "But every year, the
Legislature reallocates that money."
Poor decisions by Florida condo boards is big concern
The June 24 collapse of a 40-year-old, 12-story oceanfront
condo in Miami-Dade County raises questions regarding the
role the building's homeowners association board may have
played in the disaster.
The board's then-president resigned in 2019 after
association members balked at spending several million
dollars to make repairs recommended in an inspection report
the previous year, according to news reports. In April of
this year, the board's current president warned residents in
a letter that the building's deterioration was
"accelerating."
Although it will take months to determine specifically what
caused the collapse, experts say timely repairs could have
made a difference.
"I don't know if it would have averted the collapse because
we still don't know all the factors, but had they repaired
the building properly, it would have been stronger," said
Joel Figeuroa-Vallines, an Orlando-based structural
engineering consultant who is also a fellow with the
American Society of Civil Engineers.
As of late Thursday, the death toll for the collapsed condo
in Miami-Dade County's Surfside community topped 60 people
with dozens still missing.
The Surfside condo collapse underscores the need to better
educate condo association board members throughout Florida
on what it takes to properly maintain buildings,
particularly those in coastal communities, said Moore.
"The biggest thing we face is educating these board
members," he said.
The most recent annual report from the Division of Florida
Condominiums, Timeshares and Mobile Homes shows it held 22
training sessions that reached 4,176 condo association board
members in the fiscal year that ended June 30, 2020.
The topics addressed included the process for filing
complaints, certifying board members, and the rights and
responsibilities of condo unit owners and condo
associations.
"Twenty-two classes, that's a joke," said Moore, whose
Washington, D.C. area-based company that represents condo
associations throughout the country. "That's less than two a
month and we have more than 20,000 condo associations in
Florida. There's also nothing in that about the consequences
of deferred maintenance and reserves."
The Sunshine State has more than 1.5 million condo units,
the most of any state in the nation. Many were built in the
1960s, '70s and '80s.
Patrick Fargason, a spokesman for the Division of Florida
Condominiums, Timeshares & Mobile Homes, said he could only
respond to emailed written questions. As of Thursday night,
he had yet to respond to inquiries for this story.
"We are working through the dozens of requests for
information regarding condos and Surfside as they are
received and hope to have you something back soon," he wrote
in an email early Friday morning.
State Sen. Wright said diverting money from the Division of
Florida Condos trust fund into the state's general fund is
par for the course for the Legislature.
"The Legislature sweeps whatever we can get our hands on
like we were doing for the Sadowski Fund for affordable
housing," said Wright. "The Legislature sweeps a lot of
accounts. We finally put a stop to sweeping the Sadowski
Fund."
But state Rep. Paul Renner, in line to be the next speaker
of the state House, defended the practice.
"We have dozens and dozens of funds. The title of the trust
fund in some ways is a misnomer," the Palm Coast Republican
said. "Just because it went into the general fund doesn't
mean the money wasn't spent on something equally important."
The Legislature has been taking hundreds of millions of
dollars out of dozens of state trust funds for decades to
shore up holes in the budget, especially during times of
economic downturn when revenues are short.
Once it goes into the general fund, it’s impossible to
track.
But one thing is for sure, the money didn’t go to
condominium regulation and education as intended.
“Those monies should be spent on condominium owners
themselves. They’re the ones who pay the fee,” said Eric
Glazer, a South Florida attorney who has represented both
homeowners and associations for more than 30 years. “Condo
owners in effect are being taxed.”
For lawmakers motivated by reform after the tragic collapse
of the Champlain Tower South condominium in Surfside,
ensuring that the money collected from condo owners is used
for its intended purpose might be a good place to start, he
said.
How condo fees are supposed to be used in Florida
Condo associations must pay the state $4 per unit by January
of each year. Mobile home owners pay $5 a year, while
timeshare unit owners pay $2 per unit each year.
What they are supposed to get for that tax, which raises an
average of about $14 million annually, is a host of services
from the division — investigating complaints, reviewing and
approving condominium documents, employing lawyers to
oversee non-binding arbitration over disputes, and educating
condo owners and board members about the law.
But the ever-changing 157-page Florida Condominium Act
limits the investigative jurisdiction of the Division of
Florida Condominiums, Timeshares & Mobile Homes once a condo
building has been constructed and turned over to residents.
After that, the division only investigates complaints
related to "financial issues, elections and unit- owner
access to association records."
That wasn't always the case.
Prior to 2008, the division had oversight responsibilities
regarding maintenance of condo buildings. That authority was
taken away when a new bill was signed into law that year
requiring associations to hire an architect or engineer to
perform a structural integrity check every five years.
The new law didn't make the state responsible for enforcing
that rule. It also allowed condo boards to opt out if a
majority of its members voted against the inspection.
In 2010, after several condo associations complained about
the high cost of getting inspections done, the Legislature
passed a bill repealing the five-year inspection rule.
Property appraisals no substitute for inspections
Under the Florida Condo Act as currently written, the only
periodic check that condo associations are required to make
is an independent property insurance appraisal every three
years to determine the cost of replacing the shell of the
building as well as its common area amenities.
"An insurance appraisal is not a substitute for structural
inspections," said Gary Maehle, owner of Allied Appraisal
Services in Pompano Beach. "When we appraise a condo
building, we do not make a physical inspection of the
condition of the building. Essentially, we measure the
building and find out all the components of construction to
determine the replacement cost."
Dreux Isaac, an Orlando-based insurance appraiser who
evaluates condo buildings throughout the state, concurred.
"Insurance appraisals of condo buildings are not an
investigation," the owner of Dreux Issac & Associates said.
"It's not an engineering study in any sense. An appraisal to
determine replacement cost is somewhat of a modified shell
appraisal. The appraiser does not look at the structural
condition of a building."
Condo board 'bites bullet' for major overhaul
This is a close-up look at temporary bracing recently
installed for each of the balconies at the oceanfront
Shoreham By The Sea high-rise condominium complex at 5301 S.
Atlantic Ave. in New Smyrna Beach, pictured on Wednesday,
July 7, 2021. The complex is set to undergo an extensive
rehabilitation project in early August.
Some beachside residents in New Smyrna Beach recently
expressed alarm at the temporary poles that were installed
to shore up the balconies of each of the 58 units at the
oceanfront Shorehom By The Sea condo complex at 5301 S.
Atlantic Ave.
Tom Ryon, a consultant for the condo owners association at
Shorehom By The Sea condo, said the temporary bracing was
installed as a prelude to an extensive repair and renovation
project to rehabilitate and modernize the late 1970s-built
seven-story towers.
"The buildings were built 42 and 41 years ago, so we're
bringing everything up to code," he said. "There will be
concrete work done and we're taking out and replacing every
one of the sliding glass doors and windows. The casings are
40-plus years old and the buildings have never been updated.
"We had engineers look at the entire building for both
buildings and decided let's bite the bullet and do it all at
once as opposed to piecemeal," he said. "Basically
everything that's outside we're replacing including the
walkways, lighting and signs. We're also resurfacing the
pool and installing a new handicapped restroom."
"The board we have now is already looking ahead to the next
renovation. Everyone recognizes this is something that needs
to be done every few years," he said.
But the example set by Shorehom By The Sea may be the
exception rather than the rule.
"I've looked at so many condo buildings over the years in
coastal communities throughout the state and corrosion is a
prevalent problem," said Dreux Isaac, the Orlando-based
property insurance appraiser. "It becomes this monster where
repairs are deferred and delayed and the problems continue
to snowball."
Money already there to improve condo oversight
Between 2002 and 2004, the Legislature swept over $10
million out of the Condominium, Time Share and Mobile Home
Trust fund to help subsidize the working capital trust fund.
It left the condo trust fund alone for four years after
that, until 2008, when it grabbed $10 million and swept it
into the general fund.
That same year, then-Gov. Charlie Crist signed a bill that
took away the condo division’s authority over fiduciary and
maintenance issues, leaving it to only handle disputes over
elections and access to financial records.
From then on, it’s been a steady onslaught of cherry-picking
anywhere from $2 million to $6 million as needed.
For the past four years, the state has allocated just over
$7 million a year to compliance and enforcement and swept $5
million into the general fund.
Glazer said that money could buy enough inspectors to cover
the state and back office staff to write up violation
letters and compliance notices.
“The money is clearly there to do that,” Glazer said. ”Those
extra dollars could create an entirely new state division
under the Department of Business and Professional Regulation
with inspectors throughout the state to check on the
structural integrity of condominiums."
Moore, the condo association lobbyist, would like to see the
$5 million a year collected from condo fees that is
currently being diverted to instead be used to pay for more
training for association board members — including classes
on how to properly maintain oceanfront buildings.
He said he envisions the Legislature adopting some sort of a
statewide program mandating structural inspections for
re-certification of condo buildings every 10 years,
beginning at either year 20 or 30.
"They could either make it an unfunded mandate by having
local inspectors or they could use some of the $5 million
for a statewide high-rise re-inspection program," Moore
said. "Without having to raise any more money, they can have
a much better program."
Sen. Wright said he is normally a proponent of home rule,
but in the case of high-rise condos, "Don't you think the
state should come up with uniform state standards for condo
maintenance and inspections, like it does for building
codes?"
Rep. Renner said he is not ready to take that step.
"It's too early to determine what should be done," he said.
"We should be careful not to adopt new laws that don't
sufficiently address the problem. We're definitely going to
address it and not leave anything off the table at the next
legislative session, but we need to let the facts guide us."
'Anybody that's in a condo now is concerned'
Roseanne Tornatore, a Daytona Beach Shores resident who
lives in a fourth-floor unit of an oceanfront condo tower
called the Palma Bella, said something needs to change and
soon.
"Everybody's calling me saying get the hell out of there,"
she said, adding that her building which is only 14 years
old appears to be in good condition.
On the other hand, she said, "When was it last inspected? I
have no clue. And anybody that's in a condo now is
concerned. I mean everybody."
"It's a wake-up call that maybe we need to change the laws."